Data Protection and Digital Information Bill

Debate between Viscount Younger of Leckie and Baroness Sherlock

Committee stage
Wednesday 24th April 2024 Grand Committee

[Viscount Younger of Leckie (Con)]

My understanding —with his experience, I am sure that the noble Lord will be ahead of me on this—is that this is defined. We define it pretty clearly in paragraph 1(2). In the interests of time, I will reflect on what he has asked and will be absolutely sure to add this to the letter that I pledged to write on Monday—it is getting bigger by the moment, as I fully expected.

[Baroness Sherlock (Lab)]

My Lords, as I asked only four questions, I want to try to nail each one as we go. I am grateful to the Minister. Before we leave the matter of the kind of organisations to which this applies, I think that he is saying that the Bill would allow the DWP to request information from any kind of organisation, including phone companies, which I asked about specifically. The kinds of organisations are to be specified in regulations, which the Government will bring forward, initially naming financial institutions. By virtue of further regulations, could they extend that to anything—to Garmin, the people who monitor your runs, to gyms and to anyone else? Is that correct?

[Viscount Younger of Leckie (Con)]

That is correct. I hope indeed that it provides some reassurance that extending it to the banks and financial institutions initially is deliberately designed to be narrow. It would be subject to both Houses to debate other areas beyond those. I am coming on to address that. The noble Baroness asked about phone companies. Simply put, we will be able to designate the third parties that fit within the provisions of this legislation where they hold information that would help us to verify whether someone meets the eligibility criteria for the benefit that they are receiving. However, ultimately, it would be for Parliament to decide whether a third party can be designated under this power, as we must bring affirmative regulations forward to do this. We have that power.

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[Baroness Sherlock (Lab)]

I am most grateful to the Minister. There is one question, so I apologise if he answered it and I did not quite pick it up. I specifically asked if these powers would allow the DWP to devise criteria designed to identify if a claimant was in fact living with another adult. With the appropriate regulation, would the powers allow it to do that?

[Viscount Younger of Leckie (Con)]

That is one of the questions that I can now answer. The power will allow this, in so far as it pertains to helping the Secretary of State establish whether the benefits are being paid properly, as with paragraph 1(2) of new Schedule 3B. Rules around living together are relevant only to some benefits. That is a very short answer, but I could expand on it.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

No, I did not, but that is something which surely we can deal with outside the Room. However, I can assure noble Lords that it is in there.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his attempts to answer my questions and those of many noble Lords. I will not detain the Committee for very long at all.

I am grateful to know that there will be a code and that it will be consulted on. Given that, it would have saved an awful lot of trouble if the Government had simply not put “may” in the Bill in the first place—that would have cut out a whole loop of this. I am very grateful to know that that is there. I agree with the Minister that we all want to know about and to clamp down on fraud and error; the question is one of proportionality.

When the Minister comes to write—I realise that this letter is turning into “War and Peace”, but it will make us all come to Report in a much better place if we can get a clearer answer to many of these questions— I still wonder whether he properly answered the question from the noble Lord, Lord Anderson, about the legality of these powers, because the point about when they engage is crucial. The Minister is still coming back to a distinction between the gathering of the data and what the DWP will do using its existing “business as usual” powers, to investigate. I think the point the noble Lord was making is that the question of legality engages at the point of that data gathering, not at the point at which it is used, if I am correct. I am not sure that the Minister answered that—I am not inviting him to do it now—but I specifically suggest that he takes advice on that point before we come back on Report.

The other issue is that, if the Government have come in so late in the day introducing these powers into the Bill, it would have been better to have draft regulations before Report at the first stage. The Minister thinks the code can be available in the summer, but the summer is fast approaching so I see no reason why the usual channels could not accommodate the date for Report to allow us to go past the date for producing a draft code if the Government wish to. I realise that they may not wish to, but it must be perfectly possible—unless the Minister knows something I do not about a likely date of a general election, presumably we should still have time to do that. So I commend that thought to him.

However, we also know that a lot of the constraints he has described will happen solely in regulations. Everybody in this Committee is aware of the limitations of the capacity of both Houses to do anything about regulations. We cannot amend them here. The Government will bring them forward, but the capacity of us to do anything about that is small, so that is not as much of an assurance as it would be in other circumstances.

Finally, what I am left with is that these powers could do anything from something that might sound very proportionate to something that might sound entirely disproportionate, and we simply have not heard anything that enables us to make a judgment early enough to know where that is contained. I therefore ask the Government to think again before Report about ways in which they might provide assurance about a more contained and proportionate approach to these measures.

Since we are in Committee, in the meantime, I thank all noble Lords for their work on this and the Minister for his response. Before I beg leave to withdraw, I see that the Minister is intervening on me now, which is a joyful change.

[Viscount Younger of Leckie (Con)]

Before the noble Baroness sits down, I want to say one very important thing. As ever with Bills, there is an opportunity to engage, and I pledge right now to engage with all noble Lords who wish to, and we would like to as well, on these particular measures, to provide, I hope, further reassurances to those that I have given. I hope there is some acceptance that I have given some reassurances.

[Baroness Sherlock (Lab)]

My Lords, I am sure that on behalf of the Committee I can thank the Minister for that generous offer, and we look forward to taking it up. In the meantime, I beg leave to withdraw the amendment.

Personal Independence Payments

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 23rd April 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

As the noble Baroness will know, you can claim PIP whether you are in or out of work. More than 5 million disabled people are in work. One of the aims is to continue to encourage those who are disabled to take up some form of work. I say again that it is incredibly important that this is done in a measured and targeted way in line with the needs of the individual.

[Baroness Sherlock (Lab)]

My Lords, the Minister mentions that this as a conversation but that is not how the headlines read, is it? The headlines are that the Prime Minister and the Secretary of State are all about cracking down on young people, mental health problems, people who are sick, and people who do not want to work. The Government created PIP, so if there is a problem with PIP it is their problem. Everything about it is the Government’s responsibility. We have had 14 years. We have a problem with record numbers of people being locked out of work because of long-term sickness. How much of that is to down to the NHS failing? How much is down to lack of mental health services? How much is down to the fact that the systems that the Government have created do not work? We need change but, somehow, it is always jam tomorrow. I want to hear the Government come up with ideas. I do not want speeches that point out that we have spent 14 years buying no jam, then saying that there is no jam, then saying that jamlessness is a problem—but no actual jam comes along. Where is the jam?

[Viscount Younger of Leckie (Con)]

I am certainly not going to allude to any jam. It may come with my tea later if I am allowed it. As the noble Baroness has alluded to, this conversation is designed to consider what future support for individuals should look at. That is why we are bringing forward this consultation on PIP. As the Prime Minister said on Friday morning, and I was there in person to see him deliver what I thought was a brilliant speech:

“This is not about making the welfare system less generous”.


It is for a greater focus on those “with the greatest needs”, for whom

“we want to make it easier to access”

support “with fewer requirements”. Those who need support will continue to get the support that they need. The consultation will explore changes to the eligibility criteria, the assessment process, as alluded to earlier, and the types of support that can be offered so that the system is better targeted towards individual needs.

Data Protection and Digital Information Bill

Debate between Viscount Younger of Leckie and Baroness Sherlock

Committee stage
Monday 22nd April 2024 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Kidron, and my noble friend Lord Sikka for introducing their amendments. I also thank all noble Lords who have spoken. I will speak to Amendments 223, 299, 302 and 303 in my name. I should probably say at this point that I am late to this party but, unlike the noble Lord, Lord Vaux, I am not a data protection specialist, I am afraid. However, I am a social security nerd, so I am here for this bit right now.

Since this is the first part of the Bill on DWP powers to tackle fraud, I need to add my little statement on the “fraud is bad” move. Fraud is a problem and has been getting worse across this Government. There have been scandals in procurement, of which the infamous PPE contracts are just one example. There is tax due that goes unpaid at scale and, in social security, the percentage of benefit expenditure lost to fraud has been rising under this Government. However, as my honourable friends made clear in the Commons, a Labour Government would take fraud seriously and pursue all those who seek to take money fraudulently or illegally from the state. They would also focus on helping people to avoid inadvertent overpayments rather than just waiting for them to make mistakes then coming down hard on them at that point. This should not need saying but, in some of the discussions on this Bill elsewhere, there has been a tendency to frame the debates rather along the lines of a classical fallacy: “Fraud is really bad. This will tackle fraud. Therefore, this must be really good”. I know that we are fortunate that in the Minister we have someone who is able to have a much more nuanced debate. I look forward to having exchanges in a way that recognises the important role of this House in scrutinising the powers that the Executive want to take unto themselves, which is exactly what Committees in the House of Lords do so well.

Scrutiny particularly matters here because, as the noble Lord, Lord Vaux, and my noble friend Lord Davies pointed out, all these amendments—more than 200 amendments, 38 new clauses and two new schedules—were introduced on Report in the Commons. My honourable friend Chris Bryant tried to recommit the Bill so that the Commons could discuss it, but the Government refused. The interesting thing is that in their anti-fraud plan back in May 2022, the Government announced that they planned to boost the DWP’s powers to get information from third parties when parliamentary time allowed. The noble Baroness, Lady Buscombe, made a fair point that departments have to wait for the right Bill to come along in order to use it, but the Government have known about this since 2022. They have had two years to draft the amendments, so although they might have had to wait for the Bill to come along, that does not seem a good enough reason for them to have waited until Report in the Commons to deposit them into the process. I hope the Minister will be able to explain the reasons for that.

My noble friend Lady Chakrabarti and others have asked some important questions about the scale on which these powers will be used; I am going to come back to that in our debate on the next group. It is hard to know the scale from the information we have so far, but DWP clearly does know, or has a sense of it, because paragraph 85 of the impact assessment states:

“Using our model to estimate volumes of hits for this measure, over the 10-year appraisal period, internal analysis has estimated that in total there will be an additional 74,000 prosecution cases, 2,500 custodial sentences and 23,000 applications for legal aid”.


It has modelled the volume of matching hits that would require investigation. Can the Minister tell the Committee what that number is? Also, what assurance can he give us that DWP has the resources to investigate that number of hits in a timely manner?

Paragraph 2 of new Schedule 3B says that the account information notices can only cover data going back a year and that they must be done in the week before they are given to DWP. Is there any time limit on how long DWP has to act on the results that have been handed over to it?

I turn now to the amendments in my name. Some of them are quite detailed because these powers are astonishingly wide and it is not at all clear how they could be used. I have deliberately tabled a series of amendments—in three groups in order to make sure that we have a chance to go into detail—to try to get information out of the Government and find out what this is about.

Amendment 223 is a minor probing amendment that would delete paragraph 3(1) of new Schedule 3B, which Schedule 11 to the Bill would insert into the 1992 Act. I will not rehearse it here but can the Minister explain what that provision is for and what its limits are? Neither I nor the people I have spoken to in financial services can understand why it is needed.

The noble Baroness, Lady Kidron, and others mentioned the fact that the Information Commissioner said he could not provide to Parliament his assurance that this measure is proportionate. My other amendments in this group are therefore designed to try to understand the impacts better. Amendment 302 would prevent these new powers coming into force automatically, while Amendment 303 would require the Secretary of State to fulfil several requirements before laying regulations to commence the powers. Amendment 299 is a minor consequential amendment. The effect of this is that the Secretary of State would have to issue a call for evidence, to inform the creation of the first code of practice, and consult relevant bodies. They would also have to lay before Parliament statements on key issues, of which I will highlight two.

The first would say whether and how AI will be used in exercising these powers, as well as how those proposals will take account of protected characteristics; this was touched on by my noble friend Lady Lister and others. That benefits often engage protected characteristics is in the nature of social security. Sickness and disability benefits engage disability, obviously; pensions engage age; benefits relating to children may engage age and also indirectly engage sex; and so on. The National Audit Office has warned that machine learning risks bias towards certain vulnerable groups and people with protected characteristics. So, what external governance or oversight is there to ensure that, once data are collected on the scale envisaged here, we do not end up with a mass breach of equality law?

The second issue I want to highlight concerns the provision that will be made to ensure that individuals subject to investigation do not experience hardship during it or lasting detriment afterwards. Given the comments of my noble friend Lady Lister about the cases from CPAG, can the Minister say whether a claimant’s benefits will be kept in payment while they are investigated following the data that are surfaced as a result of these trawls?

I am concerned that, given the potential scale of hits, a claimant who had, say, inadvertently breached the capital limit but then found themselves at the back of a long queue to be investigated could find themselves ending up paying back really large sums. The Minister will be aware of the recent media coverage, which others have mentioned, of how the DWP is treating people who were overpaid the carer’s allowance, a benefit that gives £81.90 a week to people providing at least 35 hours a week of unpaid care. It is a cliff-edge benefit—if your net earnings are under £150 a week, you get the lot; if they are over it, you get nothing—so a small rise in the minimum wage or a change in tax thresholds or rates can be enough to make someone entirely ineligible overnight, even if nothing changes in their circumstances.

As my noble friend Lady Lister said, apparently, DWP’s IT systems can flag when a carer’s income breaches the threshold but it does not necessarily do that, allowing them then to rack up potentially thousands of pounds’ worth of overpayments. The Guardian has investigated this issue; I shall mention two cases that it offered. First, an unpaid carer with a part-time charity job unknowingly breached the threshold by an average of £4.40 a week—£58 in total—caused by the automatic uprating of the national minimum wage. Because that left her not eligible for anything, she ended up being told to repay £1,715, including a civil penalty.

In the second example, a woman caring for her husband with dementia and Parkinson’s was told to repay nearly £4,000 for inadvertently exceeding the earnings threshold by calculating earnings from her zero-hours job on a monthly basis, as she thought the rules required, rather than a four-weekly basis, which they actually do; the rules around allowable costs and earnings are quite complicated. Crucially, according to the Guardian, she was told that, if she appealed, it could cost her even more. The Guardian quotes from a DWP letter telling her that, if she challenged the repayment order,

“the entire claim from the date it started will be looked at, which could potentially result in the overpayment increasing”.

Is that standard practice? Is DWP currently acting on all the alerts it receives of overpayments? If these powers are switched on, what safeguards will there be when that happens to protect millions of people from ending up paying back years of overpayments that DWP could have prevented?

Before embarking on investigations on this scale, we need to understand more about how this measure will work. We have had some excellent questions in Committee from the noble Lord, Lord Vaux, and others; I look forward to the Minister’s reply.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I thank all those who have spoken today. I have been made well aware of the strong views expressed about this measure in Committee. I thank the noble Baroness, Lady Sherlock, for her kind remarks. She is right: I take all these matters extremely seriously. I have listened carefully to all the speeches, although I might not agree with them. Many questions have been asked. I will attempt to cover them all, of course; I doubt that I will be able to but I assure noble Lords that it is likely that a long letter will be required after this. Obviously, I will reflect on all the speeches made in Committee today.

I start by talking about the timing of the introduction of this measure. The noble Baroness, Lady Sherlock, said that the measure was introduced, in her words, “on the late side”. As she alluded to, the DWP published the Fraud Plan in May 2022, where it outlined a number of new powers that it would seek to secure when parliamentary time allowed. In answer to her question and others, in the parliamentary time available, the DWP has prioritised our key third-party data-gathering measure, which will help it tackle one of the largest causes of fraud and error in the welfare system. We will not sit back and ignore an opportunity to bring down these unacceptable losses and better protect taxpayers’ money. I will expand on all of that later in my remarks.

Before attending to the themes raised and addressing the amendments, it is important to set out the context for the power for which we are legislating. Fraud is a serious and damaging UK-wide issue, accounting for more than 40% of all crime. To be fair, many speeches alluded to that. The welfare system is also a target for fraudsters, and we are seeing increasingly sophisticated attacks occur on a scale that we have not seen in the past. We all have our own experiences at home of fraudsters who try completely different methods, not linked to the benefits system at all, to try to gain money through ill-gotten uses and methods.

In 2022-23, the DWP paid out more than £230 billion in benefits and payments to people across Great Britain. I very much took note of the figure that my noble friend Lady Buscombe raised. I say to the Committee that this figure is forecast to rise to nearly £300 billion by 2024-25, in quite short order, so this is a really serious issue to address. However, more than £8 billion has been overpaid in each of the past three years because of deliberate fraud against the state or because genuine errors have been made.

To assist the noble Baroness, Lady Lister, to whose speech I listened carefully, fraud, not error, is the biggest cause of welfare overpayments, totalling £6.4 billion of the £8.3 billion overpaid last year. The noble Lord, Lord Vaux, also asked about the figures. These losses are largely because people are intentionally and knowingly taking money that they are not entitled to. This is not organised fraud either; the vast majority comes from individuals who are not entitled to the money. We cannot underestimate the lengths to which some will go in order to take money they are not entitled to or promote ways to defraud us to a wider audience. This new legislation is not just about protecting the taxpayer; it will help those who make genuine mistakes in their claim, and our swift action will avoid them building up large overpayments.

Some people have said that the department has the powers that it needs to fight fraud and error—I think that was alluded to even today. However, some of the current powers that we have to ensure benefit correctness are over 20 years old—a point that I think my noble friend Lady Buscombe made. In this time, fraud has evolved and become increasingly sophisticated and we must keep pace with the fraudsters. It is for this reason that the Government are bringing these new third-party data powers, as set out, as said earlier, in the fraud plan.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, the debate on this group has focused largely on the amendments from the noble Baroness, Lady Sherlock, regarding using powers only where there is a suspicion of fraud, making provisions so that information collected can be used only for the narrow purpose of determining overpayment, removing pension-age benefits from the scope of the powers and requiring approval from Parliament before the power can be used on specific working-age benefits.

I was going to go over the reason behind these measures once again, but I will not delay the Committee on why we are bringing them forward. I believe I did that at some length in the previous group, so I am going to turn to the amendments raised.

Narrowing these powers as suggested by the noble Baroness, with Amendments 220, 221, 222 and 222A, will leave us exposed to those who are deliberately aiming to defraud the welfare system and undermine the policy intent of this measure. In fact, taken together, these amendments would render the power unworkable and ineffective.

To restrict the power to cases where DWP already has a suspicion of fraud, as suggested by the noble Baroness, would defeat the purpose of this measure. The intent is to enable us to use data from third parties to independently check that benefit eligibility rules are being complied with. We use data from other sources to do this already. For example, we use data from HMRC to verify earnings in UC and check that the benefit eligibility rules are being complied with. Parliament has determined that, to be eligible for a benefit, certain rules and requirements must be met, and the Government have a responsibility to ensure that taxpayers’ money is spent responsibly. Therefore, the DWP should be able to utilise information from third parties to discharge that duty. This is an appropriate and proportionate response to a significant fraud and error challenge.

The noble Baroness, Lady Sherlock, also proposed that the power should be restricted such that it would not apply to persons who hold an account into which a benefit is paid on behalf of someone who cannot manage their own financial affairs—such persons are referred to as “appointees”. An appointee is a person who may be appointed by the Secretary of State to act on behalf of the benefit customer. Usually, the appointee becomes legally responsible for acting on the customer’s behalf in all matters related to the claim. It is also made clear to the appointee, in the documents that they sign, that we may get information about them or the person they are acting for from other parties, or for any other purposes that the law allows, to check the information they provide.

Under our proposed legislation, it is right to say that there may be some people who are not themselves benefit claimants but who have given a person permission to pay benefits into their bank account, who may be picked up in the data returned by third parties. Under the noble Baroness’s amendment, we would not be able to gather data on appointees, which would make the power unworkable, because third parties would not be able to distinguish between an individual managing their own benefit and an appointee. It also assumes that no fraud or error can occur in these cases, which is definitely wrong. I assure the noble Baroness that we handle such cases regularly and have robust existing processes for identifying appointees on our own database and for carefully handling cases of this nature.

The noble Baroness would also like to see the power—

[Baroness Sherlock (Lab)]

Rather than asking all my questions at the end—I only have four—I will try to get answers as we go. On the appointees, I think that the Minister has just said that the reason the Government need these powers is that some appointees will have their benefit money paid into their own account, not into a separate second account, so that therefore needs to be the case. I am very happy to reword this amendment to make that clear. I was talking specifically about the linking arrangements; the amendment does not talk about excluding appointee accounts. It specifically says that accounts that are linked to an account into which the benefit is paid are not there. I am happy to reframe that in a way that defines it—I am sure we can find a way around this—but does the Minister accept the principle behind this: that, if there is a separate account that, say, I hold for a child who is there, this should not give a reason to look into my own accounts? Or is he saying that the Government want to look into my own accounts, or business accounts, or family accounts as well? Which is it?

[Viscount Younger of Leckie (Con)]

The Government do wish to have that power. I should make it clear that an appointee could be a claimant as well, so there is a dual issue. It is important that we retain that power, to be sure that we cover the whole ground. But I will reflect on the noble Baroness’s point.

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[Viscount Younger of Leckie (Con)]

That is understood. I know that I need to provide further reassurances. Attorneys are included for the reasons that I set out for appointees.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for taking the time to try to answer the questions. I know that we have given him a hard time, but I thank him for responding so graciously.

He did not take the opportunity to explain the process simply to the Committee. It may be that it is too difficult to explain simply or that, in fact, he can explain what they intend to do, but the powers allow them to do something much wider than that. It would be helpful if he could reflect before he writes as to how best to frame this. I think I heard him trying to say to the Committee that people think that more information is being handed over than will in fact be handed over. If that is the case, it would be helpful if he could spell that out because that would at least begin to help people understand better what is going on.

Secondly, in responding to me, the Minister focused, understandably, on the content of the amendments. I was trying to explain that the reason they are probing is that it is quite hard to get a handle on this. It is a big, sprawly thing, and I am trying to find a way of nailing some jelly to the table; I am trying to find ways of containing it. I still do not know which benefits the Government can use the powers over and which ones they intend to. It is a great step forward to know where they are going to start; that is really helpful. I am also grateful for the clarity, whether people are happy or not, that the Government intend to use the powers on the state pension and make that clear because that was not the impression given in the House of Commons when the matter was debated there. That is a helpful piece of clarity for the Committee and the wider community.

I know this is hard; fraud is difficult. A case was mentioned where an organised fraud gang stole more than £50 million in social security benefits. I know it is hard, and I know it is hard for the DWP to understand precisely where these things will lead when you begin to go there. I understand that if it is too boxed in, it makes it difficult to be able to follow where the fraudsters go, who are often one step ahead of the Government. I get all of that, but there is a risk that when it has spread so widely, the level of concern gets to the point that it will not be as publicly acceptable as the Minister thinks it is. I ask him to take the opportunity, when he goes back to the department, to talk to colleagues and think about what kind of assurances the Government could try to find a way of giving to people, either staging processes or government oversight. I ask him to think about that because the kinds of concerns he has heard here will only increase as the powers start to unfold.

In the next group of amendments, which I think will now be discussed on Wednesday, I want to dig further into the question of who the data and account notice can be given to and what criteria will be used. That will be another chance to flush out some things, so I give notice now that I would like the Minister to look into those areas next. I am grateful for his efforts and to all Members of the Committee who have explored this matter. I beg leave to withdraw my amendment.

Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 26th March 2024 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his introduction to these regulations and all noble Lords who have spoken for their contributions. I should perhaps say that nothing in my speeches should ever be taken as actuarial advice or indeed advice of any kind, unless you have money to burn. As we have heard, these regulations implement significant changes to the DB scheme-specific funding requirements in association with the revised DB funding code. I will go through what I understand them to be doing—I invite the Minister to correct me if I have it wrong—and I have some questions.

The changes are driven by the recognition that most DB schemes are closed to future accruals and are maturing, which makes the longer-term strategic management of them important if members are to make sure they get their benefits in full when they fall due. The key principles underpinning the changes are a requirement for schemes to be in a state of low dependency on their sponsoring employer by the time they significantly mature, and better trustee engagement and better understanding and accountability between trustees and the regulator.

The regulations require trustees to agree a funding and investment strategy—an FIS—with the sponsoring employer, which will set out that longer-term funding objective and how it will be achieved over the lifespan of the scheme. Schedule 1 then sets out the matters and principles that trustees must have regard to in setting their FIS, and that they have to think about liquidity and unexpected requirements on the journey and after significant maturity, including the strength of the employer covenant, which I will come back to in a moment.

The trustees have to consult the employer on a statement of strategy on progress in achieving their FIS. In the absence of a Keeling schedule—I confess I am slightly obsessed with them—I went back to the Pensions Act 2004. Section 221B states that

“trustees or managers must, as soon as reasonably practicable after determining or revising the scheme’s funding and investment strategy, prepare a written statement of … the scheme’s funding and investment strategy, and … the supplementary matters set out in subsection (2)”.

Paragraphs (a) to (c) of Section 221B(2) say that the supplementary matters are: the extent to which trustees or managers think the funding and investment strategy is being successfully implemented, and if not, what they will do about it; the main risks faced by the scheme in implementing the funding investment strategy and what they are doing about the risks; and their reflections on past decisions and lessons learned. Paragraph (d) adds:

“such other matters as may be prescribed”.

These matters are now prescribed because they are defined by Schedule 2 to these regulations, which specifies the information to be covered in the strategy statement.

I assume this means that TPR will now have discretion on the level of detail it can request from a scheme in relation to the supplementary matters. Otherwise, without that discretion, it would have to rely on its existing powers and the setting of the clearer funding standards in these regulations. Is that a correct assumption? How will the DWP monitor whether the regulator is delivering that higher level of probability for which it is shooting? Are the Government leaving the door open to the prospect of increasing the regulator’s powers? That is an interesting one.

To return to the covenant, Regulation 7 puts the employer covenant assessment on a formal legal footing for the first time. The covenant now appears to be central to the new regulatory framework, rather than being left for the regulator to cover in the code. I presume the intention is for this to be an area of increased focus for trustees. This is welcome, given the increasing importance of covenant strength to the decisions made by trustees, although I suspect the law is catching up with trustee thinking as much as driving it.

However, getting access to enough information to assess the employer covenant is not always easy, and trustees and employers may not always align in their view of the strength of the covenant. The Minister mentioned that change can come quickly. We live in a world where changing markets and the impact of technology, mergers and acquisitions, leveraging and new creditors can all make a material difference to the strength of the covenant in pretty short order. The same forces can also reduce trustee confidence in the strength of the covenant in the longer term.

Regulation 7 requires trustees to assess the strength of the employer covenant, looking at current and future developments and the resilience of the business when they are setting or revising the FIS. As the Minister mentioned, funding deficits must be addressed

“as soon as the employer can reasonably afford”.

But we are also told that the impact on the sustainable growth of the business must be taken into account. Does that not put the trustee in the position of being faced with a push-me pull-you set of regulatory requirements, where the two are pulling in different directions?

Trustees will be required to seek more detailed information from the employer regarding its business. The regulator will provide updated guidance on the covenant, which will set out its expectations of both employers and trustees, and the regulations will clearly require trustees and employers to work more collaboratively in future. I have two questions about this, following the issue flagged up by my noble friend Lady Drake. Because placing the assessment of an employer covenant on a legal basis is novel, we need the Minister to make it clear how the regulator will resolve disagreements between trustees and employers on the current and future strength of the covenant, where that is inhibiting agreement on the FIS. If they cannot agree on the FIS because of different views on the strength of that, what will the regulator do about it? Secondly, will the regulator be able to impose its own view of the covenant on trustees?

Regulation 16 strengthens the requirements on the chair in respect of the strategy statement. It seems that the code has been drafted in a manner which assumes that chairs of trustees are appointed by the trustee board. I believe that there are still occupational schemes where the appointment of the chair is wholly the decision of the employer. Does this carry any implications for the requirements placed on chairs appointed in that way?

The costs incurred by trustees, which are funded by employers, will inevitably increase as a result of this. I am quite sure that the Minister will have read the 13th report of the Secondary Legislation Scrutiny Committee. I will not read it out in detail, but it points out the DWP’s assessment that about 16% of DB schemes had deficits in March 2023. It says:

“The Impact Assessment … claims that, as a result of these Regulations, DB schemes’ aggregate ‘deficit reduction contributions’ could be around £0.26 billion lower over the 10-year period compared to the current situation”.


It goes on to point out a range of issues around this, but what interests me is this:

“We note … that the IA states that it is based on data from March 2021, ‘therefore more recent market developments (particularly the rise in interest rates and gilt yields which impacted the estimated liabilities) are not captured in the modelling.’ In the light of market volatility, the House may wish to explore how robust DWP’s assumptions are about the potential benefits of these Regulations”.


I do not have a dog in this fight, but could the Minister put a response to that on the record? What assurances can he give the Committee in response to the concerns of the Secondary Legislation Scrutiny Committee?

Another point was made by that committee in its 17th report. I think the Minister indicated—or maybe he did not; I cannot remember—that this is a revised version of an instrument originally laid on 29 January. The DWP had to amend the content to amend the commencement date of one of the provisions to ensure that it aligned with the policy intention. Yet again, for the record I note a disappointment that once again we are having another instrument laid because of errors made in the original that needed to be corrected. It is becoming a bit of a pattern, I am afraid. But in this case, it provides us with an opportunity. In its 17th report, the SLSC said at paragraph 7:

“Our 13th Report of this session provided the House with extensive supplementary information on how the obligation is intended to work, and we are disappointed that DWP did not take this opportunity to improve its Explanatory Memorandum”.


Can the Minister explain to the Committee why the Government did not take that opportunity afforded to them by the need to reissue the instrument?

I have two quick points to make that were raised by other Members. First, on the Work and Pensions Select Committee report, the Minister said that the Government would respond to that in due course. I recognise that it has only just come out and they will not be able to. However, there is one point that would be helpful in particular—they will already have thought about this—which is that the committee raised the position of open schemes and relayed concerns that, despite some of the changes that had been made, some open schemes still thought that the new regime could require them to de-risk prematurely. Are the Government confident that they have landed in the right space on this?

Secondly, my noble friend Lady Drake asked a very important question about the regime governing investment by schemes that have reached significant maturity, essentially about whether they will no longer be required to balance cash from investments and liabilities going out. It would be very helpful if we could know about both of those.

I apologise to the Minister that I have, yet again, asked a number of questions, but I am grateful and look forward to his reply.

[Viscount Younger of Leckie (Con)]

My Lords, I thank all those who have spoken in this short debate. As usual, there were a number of specific and quite technical questions, notably from the noble Baroness, Lady Sherlock. I shall do my best to answer them. I think that some of them may be included in some of my rounding-up answers to other questions—but, as she will expect me to, I shall write a letter copying in all Peers if I fail to answer all of them.

Just on the question that the noble Baroness raised about the draft regulations, we outlined in the consultation response, as she alluded to, on 26 January 2024, that we would legislate for the regulations to come into force from April 2024, applying to scheme valuations from September 2024. That recognised feedback through the consultation about the need to give the pensions industry sufficient time to prepare before the requirements took effect. The regulations as drafted meant that one component of the reforms, the recovery plans, would come into effect on 6 April 2024 and not 22 September 2024. Since laying the regulations, we have recognised that this has the potential to cause confusion and additional administrative requirements for schemes. That is why we withdrew the regulations and relaid a revised version.

For clarity, we made two changes to the regulations. The first amendment was to ensure that the changes to recovery plans took effect only when the effective date of the actuarial valuation to which the recovery plan relates is on or after 22 September 2024. The second, in light of the first, is to clarify that changes which relate to actuarial valuations and reports also apply only on or after 22 September 2024. I reassure the noble Baroness that no other changes were made. These changes restate our intention to give sponsoring employers, scheme trustees and managers the same amount of time to prepare for the new requirements in the recovery plan.

I do not believe that I have an answer to the Explanatory Memorandum question, but I shall see whether I can address that before my remarks have concluded.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

Yes, I will do my best to do so. Regarding the Explanatory Memorandum, as outlined, because the changes here were focused on clarifying the date on which the regulations came into effect, the changes to the Explanatory Memorandum were limited to reflect the change. We shall note the feedback for future SIs. That is my answer but let me reflect on it; I might well be able to enhance it in the letter that I am clearly going to have to write.

[Baroness Sherlock (Lab)]

I will not interrupt further but, just to clarify the question, the point the committee was making was not that the Explanatory Memorandum needed to be changed to reflect the changes in the instrument itself. It was that, since the department was having to relay the whole thing, why not take the opportunity to do a better job of the EM? That is all.

[Viscount Younger of Leckie (Con)]

Absolutely. I think I have already indicated that lessons have been learned. From my point of view, I regret that we fell down on the Explanatory Memorandum and that we had to relay the regulations. Just for the record, I wanted to say that.

With that, I hope that we can take these regulations forward.

Child Poverty

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 26th March 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

I think that is a little unfair from the noble Baroness. She will recognise, as I think the House does, that Ukraine has played a part. In the previous Question we heard about our role as a country, which is continuing, and we have had support from the Opposition on that. We have set a clear and sustainable approach, based on evidence of the important role that parental employment plays in reducing the risk of child poverty. We have a huge number of initiatives in my department to encourage more people to get into work. That is why, with more than 900,000 vacancies across the UK, our focus is firmly on supporting parents into and to progress in work, which helps directly with poverty.

[Baroness Sherlock (Lab)]

My Lords, the Minister challenged my noble friend and cited statistics on absolute poverty, which, as we know, is the Government’s favourite measure. The last time we discussed this, on 28 February, the Minister told me that the Government prefer absolute poverty rather than relative poverty as a measure. He said:

“The absolute poverty line is fixed in real terms, so it will only ever worsen if people are getting poorer and will only ever improve if people are getting richer”.—[Official Report, 28/2/24; col. 1028.]


Since the latest official statistics show that 600,000 more people, half of them kids, are living in absolute poverty, does the Minister accept that the Government’s policies are now pushing children into poverty? If so, what are they going to do about it?

[Viscount Younger of Leckie (Con)]

I have already spelled out what we are doing about it. Do not forget that these figures are one year out; they are retrospective figures. In my opening Answer, I spelled out what we had taken action on. The noble Baroness is right; we do prefer absolute poverty, because relative poverty can also provide counterintuitive results, as it is likely to fall during recessions due to falling median incomes. Under this measure, poverty can decrease even if people are getting poorer.

Housing Benefit: Temporary Accommodation

Debate between Viscount Younger of Leckie and Baroness Sherlock

Wednesday 28th February 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

Yes, I am very aware of the “essentials” argument that often comes up in this Chamber. I do not have any answer for the most reverend Primate except to say that we note the questions that are put on that point. I shall go a little further, because he started by mentioning housing pressures. The £1.2 billion local housing fund enables councils in England to obtain better-quality temporary accommodation for those owed a homelessness duty. That is our way of making sure that there is some progress on homes.

[Baroness Sherlock (Lab)]

My Lords, unaccountably, I am not a vice-president of the Local Government Association—no one has asked me to become one, but who knows?

A number of issues come into play here, but, basically, councils are probably going to spend heading for £2 billion on temporary accommodation this year. They have to pay up front to procure the accommodation, and then they can get back some but not all of it—and increasingly not all of it—from central government. The reality is that they are paying the price for the fact that we do not have a functioning housing system, and the Government, despite being in power for quite a long time, have an ambition but, so far, seem not to have the will to solve that problem. I am guessing that the Minister and the DWP are going to DLUHC Ministers and saying, “What are you going to do to solve this problem?” What answer are they getting?

[Viscount Younger of Leckie (Con)]

We have already taken some actions, and the noble Baroness will know that on 24 January this year the Government announced additional measures for local authorities in England worth £600 million. This includes £500 million of new funding for councils with responsibility for adult and children’s social care, distributed through the social care grant. Taking into account this new funding, local government in England will see an increase in core spending power of up to £4.5 billion next year.

UNICEF: Child Poverty Rankings

Debate between Viscount Younger of Leckie and Baroness Sherlock

Wednesday 28th February 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

Again, the noble Lord raises an important point about children, who are the subject of this Question. The latest statistics show that, between 2020-21 and 2021-22, the number of people on absolute low income was virtually unchanged, and absolute poverty rates after housing costs were stable for children and working-age adults, with strong earnings growth offsetting the impact of the withdrawal of the unprecedented levels of government support, protecting those in jobs, which were provided during the pandemic.

[Baroness Sherlock (Lab)]

My Lords, the Minister mentions various measures, but when it comes to international comparisons, the Government do not get to mark their own homework. Relative poverty is used because it is used internationally to measure poverty over time and across countries. The Minister may not like the way it was measured in other countries, but the UNICEF report card compares the UK’s performance in 2019-21 with its performance in 2012-14, and during that time, on those measures, child poverty in the UK clearly increased by 20%. During the same period, in Poland it fell by 38%, in Slovenia by 31% and in Canada by 23%. Does the Minister not accept that something is going badly wrong here?

[Viscount Younger of Leckie (Con)]

I come back to the point that it is important to have statistics that are grounded. The noble Baroness will know that, over many years, we have used our own statistics for poverty, which are cross-government. The Government prefer to look at absolute poverty, as the noble Baroness knows, rather than relative poverty, as the latter can provide counterintuitive results. The absolute poverty line is fixed in real terms, so it will only ever worsen if people are getting poorer and will only ever improve if people are getting richer.

Guaranteed Minimum Pensions Increase Order 2024

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 27th February 2024 Grand Committee

[Baroness Sherlock (Lab)]

I just want to understand that response. It does not sound like very many. I presume what the Minister is trying to say to the Committee is that, having looked at the denominator of how many people might expect to be eligible and how much they might get, that number does not feel disproportionate. Is that what he is saying?

[Viscount Younger of Leckie (Con)]

Yes—that is absolutely right. Let me see whether there is any further information that I can get to the noble Baroness on this niche matter. If I am wrong, I will write, but I will certainly write anyway. I am coming towards the end of my remarks; I have only a couple more questions to answer.

The noble Baroness, Lady Sherlock, asked where she might find the latest state pension statistics. As she may know, they are available on Stat-Xplore, but only up to May 2023. The release of updated statistics due to be published on Tuesday 13 February 2024 was suspended, as the noble Baroness alluded to in her remarks. This delay results from issues with the internal processing of state pension data after it was sent for analysis from the “Get your State Pension” system and has an impact only on statistics that are not yet published. State pension statistics previously published on Stat-Xplore in November 2023 remain reliable. Work is under way to remediate these issues, and we will publish the suspended state pension statistics as soon as we are able.

The noble Baroness also asked about the status of the auto-enrolment extension Act’s powers and the consultation. The Government remain committed to expanding the benefits of AE to younger people and helping all workers to save more for their retirement. This is why we supported the Pensions (Extension of Automatic Enrolment) Act 2023, to which the noble Baroness alluded. To cut to the quick, we intend to conduct a consultation on the detailed implementation of these measures at the right time and in the right way. That is probably not in line with what my colleague in the other place said—“in due course”—but our commitment stands to implement in the mid-2020s.

With those remarks, I will, as ever, check in Hansard that I have attempted to answer all the questions asked. The Committee should be reassured that, if I have not done so, I will write. In the meantime, I thank all three Peers for their interest.

Social Security Benefits Up-rating Order 2024

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 27th February 2024 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing this order and all noble Lords who have spoken. As he has explained, the Social Security Benefits Up-rating Order will increase most working-age benefits in line with CPI. We too welcome this instrument, because of course we want to see social security keep pace with prices, particularly at a time of spiking inflation and economic instability. That used to be the norm among both Labour and Conservative Governments, of course, but the past decade has seen a marked change.

There were of course the years of shame between 2013 and 2020, when most working-age benefits and tax credits were either frozen or uprated by small amounts, such as just 1%. Although today we are back to uprating mostly by CPI and occasionally by earnings, as my noble friend Lady Lister said, once again that uprating has been preceded by a period of speculation, which is deeply unhelpful. I can assume only that this is driven from somewhere inside the Government, because it happens too regularly. The speculation suggests that maybe this year the uprating will not be by the full amount or maybe will not happen at all.

As my noble friend mentioned, that speculation causes real stress and worry for people who depend on benefits and tax credits to survive. I begin to wonder: is it a strategy to allow Ministers the option of either freezing benefits or not uprating them fully so that, if they then finally do the right thing, people are supposed to be suitably grateful? As my noble friend Lady Lister pointed out, it is good that benefits are being uprated, but it is not an act of unusual generosity; it is simply a decision not to cut the value of benefits during a cost of living crisis.

This instrument, as we have heard, also increases the state pension by earnings in line with the triple lock. I accept the distinction that my noble friend Lord Davies helpfully made. The rates of basic and new state pensions will rise by 8.5%, as will the standard minimum guarantee in pension credit and the higher rate of widows’ and widowers’ pensions in industrial death benefit. However, this does not apply to a number of the others. I will be interested in the Minister’s response to that. In particular, can he explain the position on the deferred state pension? If someone chooses to defer their state pension and the pattern is that the deferred amount is uprated by CPI rather than the triple lock, are they made aware of that? When people make a decision about deferral, do they understand the consequences?

I had some other questions on pensions and pensioners but I was entirely thrown by the decision to separate these two instruments this year. Most years, we do them together in a single block, so I wrote a wonderful speech waxing lyrical and weaving in pensioners and old age, but now here I am. I shall come back, if the Minister will indulge me, to a couple of more general questions on pensioners when we come to debate the next instrument.

The context for this year’s uprating, as my noble friend Lady Lister expounded in some detail—aided ably by the noble Baroness, Lady Janke—is absolutely brutal. I will not repeat the extensive critique that my noble friend made or her unpacking of the economic climate in which so many families are living, but it is brutal. The basic fact is that there are now more than 4 million children living in poverty. There are 400,000 more children living in poverty now than when Labour left office in 2010.

One of the things that bothers me about this is that, whenever somebody raises this, the Minister—I know it is in his brief—will at some point in the response use the line that the Government believe that work is the best route out of poverty. Yet, clearly, the facts speak for themselves: more than two-thirds of children who live in poverty have parents in work. Something in that picture does not work. It is something that all of us in politics must address.

We in Labour have been looking at what we would do. We have a plan to give people a better life, so that they are able to make ends meet and have a good start for their children. We are looking at making sure that there is a breakfast club in every primary school and at giving people access to cheaper energy and an insulated home. We will reform universal credit, jobcentres and employment support so that people can get a better job with better pay. We will also have a child poverty strategy. Can the Minister tell the Committee in his response what the Government’s strategy is? What is their plan to do that? Other than simply declaring that work is the best route out of poverty, what is the Government’s plan to deal with the challenge of child poverty today? I look forward to the Minister’s response.

[Viscount Younger of Leckie (Con)]

My Lords, I thank all those who have spoken in this short debate. Before I attend to the number of questions asked and subjects raised, I would like to say at the outset—I normally do this but, today, I give special feeling and meaning to it—that this Government really do fully recognise the challenges facing people across the country due to the higher cost of living.

Although inflation is trending in the right direction, with the Bank of England now forecasting a fall to a target rate of around 2% in three months’ time, I acknowledge that pressures on household budgets very much persist. I saw this for myself in a recent visit to the Earlsfield Foodbank. The Government are not complacent about such matters; I hope noble Lords will recognise that the Government have taken action on a number of fronts to address these concerns, which were raised by a number of Peers—four, to be precise—this afternoon. I may not be able to answer all the questions but I will do my very best.

Let me start at the outset—I do not think I have done this before—by saying that, although I acknowledge the remarks made by the noble Baroness, Lady Lister, I am generally disappointed that every single item was a negative. I am disappointed that nothing she said seemed to support what we have done in these regulations or what we are trying to do. We really are trying. There was a long litany of faults coming from the Government: that the uprating was not enough; on the loss of the cost of living payments; on the freeze in the LHA, which is all for the future as we do not like where we stand on that yet; on the household support fund; and on the benefits cap review, including why it was not being done.

The noble Baroness is right to ask questions but I say gently that there is no mention of the genuine headwinds that all Governments have been facing. This Government have not been alone in the experiences of the pandemic and coming out of it, as well as of the war in Ukraine. There was no indication of these whatever. It is a bit disappointing. I know that the noble Baroness will understand why I have said these things but I thought it would be worth mentioning them.

Engineered Stone and Silicosis

Debate between Viscount Younger of Leckie and Baroness Sherlock

Monday 15th January 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

The Health and Safety Executive recently carried out a post-implementation review, or PIR, of RIDDOR, which, as the noble Baroness will know, deal with the reporting of injuries, diseases and dangerous occurrences, with a view to expanding that to include areas where HSE regulatory intervention can add value. HSE will start the process of reviewing the remaining recommendations—including the inclusion of pneumoconiosis, which is, in effect, silicosis—within the next business year.

[Baroness Sherlock (Lab)]

My Lords, the HSE’s own website says:

“Silica is the biggest risk to construction workers after asbestos”.


As the Minister said, it is found in engineered stone which is used extensively in kitchens and bathrooms for counter-tops. The UK has a silica exposure limit of 0.1 milligrams per cubic metre. As I understand it, that is twice the legal limit in the United States and Germany, and four times that in Portugal. I ask the Minister: has this has been looked at recently? Is he aware that the first case of someone getting silicosis was in Australia in only 2015? Since then, hundreds more cases have come online. In Australia, this is being talked about as the asbestos of the 2020s. I urge the Government not to be complacent about it.

[Viscount Younger of Leckie (Con)]

The noble Baroness is absolutely right. I reassure the House that Great Britain has a very good record in this area and the European Union reflects our approach. For example, the silica limit in Great Britain—as the noble Baroness has pointed out—is 0.1 milligrams per metre cubed, which was set in 2006 and is now comparative across the world. The EU considered a lower limit, but it was not adopted due to uncertainties about the reliability of measuring techniques below the limit we are at.

Child Support (Management of Payments and Arrears and Fees) (Amendment) Regulations 2023

Debate between Viscount Younger of Leckie and Baroness Sherlock

Monday 18th December 2023 Grand Committee

[Baroness Sherlock (Lab)]

I do not know whether it is too historic, but I possibly should have drawn the Committee’s attention to the fact that I have a historic pecuniary interest as a former director of the Child Maintenance and Enforcement Commission; I just want to place that on record.

I am grateful for and appreciate the Minister’s thorough response. He mentioned that the Government are doing more research. Will that be published? He also mentioned an email campaign in relation to direct pay. How is that going?

[Viscount Younger of Leckie (Con)]

On the latter point, which is a good one, I shall certainly need to write to the noble Baroness. On the former one, it is fair to say that we will write as well. Those will be added to a number of other questions that I may have to answer.

Universal Credit

Debate between Viscount Younger of Leckie and Baroness Sherlock

Thursday 7th December 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

Indeed, the noble Lord raised an important point about carers, who play a vital role in our country. We are very alert to this; I will certainly take the point he raised back to the Treasury, but I am unable to comment on whether we can or cannot do it. In terms of carers, we have strong evidence that some carers would also like to take on some work if it is appropriate, so there is much work going on with job coaches, to encourage them to speak to carers to see whether it is possible for them to combine work as well as their caring responsibilities, if it is appropriate.

[Baroness Sherlock (Lab)]

My Lords, the Minister says that the Government are concerned about poverty, and he describes the things the Government have done, but we have to look at the results, because I am afraid that the Government do not get to mark their own homework. If the Minister does not like the Barnardo’s study cited by my noble friend, does he like the Joseph Rowntree Foundation finding that last year a million children experienced destitution? What about UNICEF, which found recently that the world’s worst rise in child poverty between 2012 and 2019 was in the UK—the worst of the 39 richest countries in the world? Is the Minister proud of that?

[Viscount Younger of Leckie (Con)]

I am certainly not proud of that, but, as I say, there are a number of reports that have come out, and some that have come out recently. I can only repeat again that we are aware of the pressures involved; some families find it difficult even with where they can find the next meal. We are very aware of and alert to that; I think the noble Baroness will know that we are particularly busy in looking at what more can be done to help those in absolute poverty. She will know from the Autumn Statement the measures we have taken forward, and I can only repeat again that we are very alert to this.

Department for Work and Pensions: AI

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 5th December 2023 Lords Chamber

[Baroness Sherlock]

To ask His Majesty’s Government how the Department for Work and Pensions is using artificial intelligence and what governance process is in place for such use.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, DWP has used forms of AI for some time and we continue to investigate new opportunities. This includes looking at how generative AI can help us deliver high-quality services to improve customer experience and colleague efficiency. We are aware of the transformative benefits of AI, as well as the potential risks. We have created the AI Lighthouse programme to explore opportunities, and we have a framework ensuring that we work safely, ethically and transparently.

[Baroness Sherlock (Lab)]

My Lords, this Question has become topical since I tabled it, since the Government have started to take powers to look into the bank account of every pensioner in the country. But that has made me even keener to understand exactly how DWP is using AI. Can the Minister tell the House whether it is used to select people for health reassessments, or to decide who to investigate or who to sanction? If so, what safeguards are in place to ensure that it is used transparently and fairly? How do we avoid it becoming a sort of digital version of stop and search?

[Viscount Younger of Leckie (Con)]

I hope I can reassure the noble Baroness that we already have a proven track record in delivering technology in a responsible and well-governed way. We have extended our governance to include an AI steering board and an assurance and advisory group. DWP always ensures that appropriate safeguards are in place for the proportionate, ethical and legal use of data, with internal monitoring protocols adhered to. I further reassure her that the Cabinet Office’s Central Digital and Data Office has recognised our Lighthouse programme’s safe acceleration framework as an exemplar for AI development in government.

Benefit Claimants: Free Prescriptions

Debate between Viscount Younger of Leckie and Baroness Sherlock

Thursday 30th November 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I begin by expressing my own condolences at the loss of the noble Lord, Lord Darling. I was shocked and greatly saddened when I heard the news earlier today. He was a giant of a man, and he was extremely helpful, indeed instrumental, in helping the country through the financial crisis back in 2008 and onwards.

It is a pleasure to close this important debate which, at its heart, is about ensuring that more people who can work are supported to do so and benefit from all the rewards of work. I start by thanking all noble Lords for their valuable contributions, in particular the right reverend Prelate the Bishop of London for initiating this debate. I also thank her for our meeting earlier this week, which was greatly appreciated. Getting into work and ensuring that work pays remains a key government priority. Building on the £7 billion employment package announced in the Spring Budget, the Autumn Statement set out a further £2.5 billion investment in employment support over the next five years. This support will ensure that no claimant reaches 18 months of unemployment if they have taken every reasonable step to comply with the jobcentre support offered to them.

I will cover two or three points upfront. I was interested in the very hard-hitting speeches from the noble Lord, Lord Davies of Brixton, and the noble Baroness, Lady Bennett. They both opined about the issues of sanctions more broadly. It is fair to say that the right reverend Prelate the Bishop of London alluded to some misrepresentation in the press. I can think only that the noble Lord and noble Baroness have maybe been reading too much in the papers, but their questions were fair.

I say at the outset that conditionality supported by sanctions has been a long-standing feature of benefit entitlement and a policy of past Governments, including past Labour Governments. Claimants on work-related benefits are generally expected to take responsibility for meeting the conditionality requirements that they have agreed to with their work coach. Where a claimant fails to attend a mandatory appointment or fails to comply with specific work-related activities without good reason, an open-ended sanction is applied. Open-ended sanctions are applied from the date of the failure up until the date that the claimant complies with the agreed requirement—I will say more about this later. I am grateful to the noble Baroness, Lady Sherlock, for her general acknowledgment of this policy.

The right reverend Prelate the Bishop of London understandably asked about continued disengagement and whether the policies we are taking forward are a bit harsh—I think that is the general principle of what she said. Perhaps I can be helpful by saying that claimants are set mandatory work-related requirements based on the benefit regime that they are in. All mandatory requirements are tailored to the claimant’s circumstances and are discussed with them beforehand, as are the consequences of failing to comply. We have also hugely increased the training that job coaches have. I reassure the House that the quality of job coaches is increasing the whole time, and there is a great deal of sensitivity involved, as the House will imagine.

Following a failure to comply, the claimant has the opportunity to provide good reason. Additionally, a pre-referral quality check is in place to check for known vulnerabilities before a sanction referral is made. Following a referral, cases are reviewed to ensure that the mandatory requirement was fairly set in the first place and to check whether a conditionality easement should have been applied. Claimants will be contacted through the normal channels from the point of sanction decision. These include a digital nudge at six weeks following the decision. Where a claimant remains disengaged following an open-ended sanction, they will receive a notification at month five that will inform them of the claimant closure intention and prompt them to re-engage or to inform us of any new circumstances that may impact this.

The right reverend Prelate asked, reasonably, about the cost of living. We remain very aware of the pressures that people are facing with the cost of living. That is why we have provided £94 billion of support across last year and this year, 2023-24, to help households and individuals with the rising cost of bills. In addition, subject to parliamentary approval, working-age benefits will rise by 6.7% from April 2024, in line with inflation. The House is well aware of the Autumn Statement announcement on the local housing allowance rates, which I know will make a considerable difference.

The right reverend Prelate asked about statutory sick pay. There is a very short answer: we will absolutely continue to keep it under review. She also asked about primary legislation and timing. Although I cannot give her any precise information on the timing, I can say that it is very unlikely that we will be able to bring this forward during this Parliament. That helps perhaps to answer a question from the noble Lord, Lord Allan of Hallam.

Turning to the issue of disengagement, I should explain that for the quarter ending August 2023, 95.3% of sanctions were for universal credit claimants failing to attend a mandatory appointment with their work coach, as opposed to refusing a job interview. These sanctions are typically open-ended, as mentioned earlier, meaning that they can easily be ended at any time by the claimant re-engaging with their work coach. We know that the majority of people who have open-ended sanctions do re-engage with the support on offer within six months. However, there is still a growing number who are choosing not to engage with employment support, despite support being available to them.

It is important to place this area in the context of the Government’s wider Back to Work plan. A key part of this is about ensuring that a short spell out of work does not turn into a period of longer-term unemployment. I am sure that we all agree with that, because the longer someone remains unemployed, the harder it is for them to return to the labour market. This can have detrimental impacts on the individual, as well as the wider economy. That is why, as part of our plan, we are bringing in much more intensive back to work support earlier on in someone’s claim. This includes upskilling, job search support, practical work experience and tailored advice to support claimants. Those claimants who remain unemployed after 18 months of intensive support will undergo a review by a work coach and will be expected to either take up a job or mandatory work placement, or engage in a programme of intensive activity.

To ensure fairness to the taxpayer, it is right that there are consequences for those who refuse to engage with the support on offer. It comes back to my initial comments at the beginning of my remarks. As a result of this new approach, no claimant should reach 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with jobcentre support. The noble Baroness, Lady Bennett of Manor Castle, asked about the additional jobcentre support—the AJS. She asked whether this was even proven to work. Perhaps I can reassure her that there is good evidence to show that work is generally good for physical and mental health and well-being, whereas worklessness is associated with poorer physical and mental health and well-being. Work can be therapeutic and can reverse the adverse health effects of unemployment. This is why the AJS aims to support those closest to the labour market to return to work as quickly as possible and prevent long-term unemployment. So we do think this is a very worthwhile project. It will send a clear message to claimants who can work about engaging properly with support.

Having covered that area, I will now focus on the important points that were raised about claim closure. I would like to, I hope, give some reassurance, and dispel a few myths which were put about. I listened carefully to the remarks made by the noble Lord, Lord Davies, whom I have much respect for. However, I am afraid that I just did not agree with much of what he said in this respect. It is important to underline that not everyone who fails to meet with their work coach is subject to a sanction. If you have good reason, you will not be sanctioned, nor will your claim be closed. The examples of “acceptable good reasons” include new or worsening illnesses, health condition flare-ups and periods of mental ill-health—which answers a question raised by another noble Lord. They also include working or attending an interview, unexpected childcare, attending the funeral of a close family member or friend, or transport failures.

Even if there is no evidence of good reason, work coaches can also apply discretionary easements, as mentioned earlier, such as domestic emergencies. When an easement is in place, we relax our requirements so that individuals will not be sanctioned, nor will the claim be closed. Still, if you do not have a good reason for a failure but you take corrective action and re-engage with the support on offer within six months, your sanction will end and your claim will not be closed.

The noble Baroness, Lady Sherlock, asked who these people were, and I hope I can help to answer that. There is a rapidly growing group of disengaged claimants, as the right reverend Prelate acknowledged, on nil award, who have had a failure without good reason and have failed to re-engage for more than six months. They have no housing or child elements attached to their claim. Crucially, this means that claimants who do have housing costs or children can rest assured that they will not be at risk of losing the income that they have come to depend on.

In addition, the people in the impacted group have not declared that they are homeless or, because they have no housing element, they are likely living with family, possibly including their parents, or their friends. We also exclude any claimant with a health condition that impedes their ability to look for or carry out work—which might play into the questions raised by the noble Baroness, Lady Bennett. It is therefore only right that we close the loophole that allows people to continue to maintain a claim without complying with any commitments.

In the remaining time, I will focus particularly on free prescriptions. This was another theme raised by the right reverend Prelate. Not everyone who is subject to a claim closure will lose access to free prescriptions. There is a variety of exemption criteria beyond receiving universal credit that would qualify an individual for free prescriptions. Claimants are entitled to help with health costs, including free prescriptions, only if they are in receipt of a monetary award of universal credit that is above zero and if their earnings in their last assessment period were below the income thresholds. Many will have stopped receiving access to free prescriptions when their claims were fully reduced by the sanction.

As always, if entitlement to other benefits is reliant solely on a universal credit claim to establish eligibility, that eligibility will cease if the claim is closed. By excluding the claimants who have more severe health conditions and vulnerabilities from sanctions, we believe that the claim closure group would likely be claiming prescriptions for only minor health conditions. I think the right reverend Prelate acknowledged this in her remarks.

There were a number of questions, particularly from the noble Lord, Lord Davies of Brixton, pressing me on the lack of support for the most vulnerable. I hope I can be a bit more helpful. A well-established system of hardship payments is available as a safeguard if a claimant demonstrates that they cannot meet their immediate and most essential needs, including accommodation, heating, food and hygiene, as a result of their sanction. In universal credit, claimants are able to apply for a hardship payment from the first assessment period the sanction reduction is applied.

The noble Lord, Lord Davies, asked about work being the best route out of poverty. He knows what my reply will be, which is that the Government are committed to a sustainable long-term approach to tackling poverty and supporting people on lower incomes. He is well aware of the expenditure that the Government are making in this area and we believe that the best route out of poverty is through work. The Government remain committed to a sustainable, long-term approach in this respect.

The noble Baroness, Lady Bennett, asked about abolishing the prescription charge. I say very briefly that the Government have no plans to abolish the prescription charge in England or to review the medical exemption qualifying list. Our policy remains to help those whose need is greatest through the rules we currently have in place.

I really ought to finish. There are a number of questions that I will most certainly answer—

[Baroness Sherlock (Lab)]

I am sure that the Minister will write, but I will ask one simple question before we are timed out: how many people could be affected by this policy?

[Viscount Younger of Leckie (Con)]

I have asked about that figure. I will need to check whether I can give it to the noble Baroness, as it is not in the public domain. It is substantial. I will write to her to give her whatever answer I can. It is a very fair question, which was also raised by the right reverend Prelate the Bishop of London. However, that is as far as I am able to go.

Carer’s Assistance (Carer Support Payment) (Scotland) Regulations 2023 (Consequential Modifications) Order 2023

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 14th November 2023 Grand Committee

[Viscount Younger of Leckie (Con)]

I start again by thanking both the noble Baroness, Lady Sherlock, and the noble Lord, Lord Palmer. This is familiar territory but I thank them for their broad support. I will attempt to answer the questions that were raised, again in no particular order.

The first question raised by the noble Lord, Lord Palmer, was simply what this order does. I tried to set that out in my opening statement but perhaps I can answer it in a different way. This particular order, and an associated negative Section 104 order, makes provision in reserved areas to ensure that the 2023 regulations are fully operational at the time of implementation. It ensures that individuals in receipt of carer support payment are treated, as I said earlier, in the same way as individuals in receipt of carer’s allowance. That might answer a question that was raised by the noble Baroness, Lady Sherlock, on the treatment. It is similar treatment but in my opening remarks I alluded to some differences that were going to come through from the Scottish Government, particularly in terms of the treatment of students. As we know, of course, there are different educational arrangements for students in Scotland compared to England. I hope I made that clear in my opening remarks, in terms of the—

[Baroness Sherlock (Lab)]

Just to clarify, what I was trying to say in the question was that the Minister had identified a couple of areas—one about residence requirements, the other about students—where people who are not currently entitled to claim carer’s allowance would be able to claim the new benefit. I was asking whether it was also the other way round; is there anyone who would not be entitled to the new benefit who is entitled to carer’s allowance, and if so, whose job is it to contact them? The Scottish Government would arguably have no locus in relation to them.

[Viscount Younger of Leckie (Con)]

I must admit—please forgive me—that I thought that was a separate question, but I remember it and I shall try to answer it at some point.

The noble Lord, Lord Palmer, asked whether the order ensures that there is no double claiming. He wanted me to confirm that there is no double claiming, double counting or duplication—and I can confirm just that. I hope that I set that out in my opening remarks as well; that is also the aim, and also comes about from the very close collaboration of working that we have with the Scottish Government and, indeed, other parties that I mentioned in my opening speech.

The noble Lord, Lord Palmer, asked about the future, as did the noble Baroness, Lady Sherlock. On learning lessons and what we will gain from this order, particularly looking north of the border, can I say two things? One is that I have no doubt that there will be a way of finding out whether the three pilots mentioned were successful, however one might define that. I confirm that it is very much a matter for the Scottish Government — so this is an enabling series of regulations, which will enable the Scottish Government in a devolved manner to do what they feel is right. But I have no doubt that there will be a way in which we can find out.

On the noble Baroness’s point about learning from this—absolutely, she makes a very good point. When these different regulations are made in the right and proper way for the devolved nations, we should and will be, with our close collaboration, learning from any lessons that might be beneficial for us in England.

The noble Baroness asked how people should apply for the carer support payment. The application process is a matter for the Scottish Government, and questions on this should be addressed to them. That is not entirely helpful, but it falls in line with my point, which is that this is enabling the Scottish Government to make the changes that they will take forward themselves.

[Baroness Sherlock (Lab)]

I was trying very carefully to ask questions of the Minister that related to his responsibilities and those of DWP, not the Scottish Government. I was not asking about how somebody would go about applying for the new benefit. There was reference in the order and Explanatory Memorandum to people being transferred from carer’s allowance to the new benefit. Until someone is transferred, the DWP has a responsibility for them. I was asking whether they could make any contact with those to whom they are currently paying carer’s allowance or whether they were leaving that entirely to the Scottish Government.

[Viscount Younger of Leckie (Con)]

Unless there is a ready answer to that, I think that gets into the granularity of the transfer process, and I shall need to write to the noble Baroness to give her some proper information on that. Again, I make the point that there is a close collaboration between the UK and Scottish Governments. It is a fair question, and I think that I need to get some granular detail on that.

The noble Baroness, Lady Sherlock, asked about impact assessments. The answer is that orders made under the Scotland Act 1998 usually do not in themselves have a direct or indirect impact, whether benefit or cost, on businesses, charities or the voluntary sector, and would not therefore have a regulatory impact assessment. This is the case for this particular order. The noble Baroness may be aware—and I just want to confirm—that this is quite usual for constitutional measures in this respect. Implementing this order is not expected to have an impact on business, charities or voluntary bodies, and there is also not expected to be a significant impact on the public sector. The appropriate impact assessments were undertaken for the Carer’s Assistance (Carer Support Payment) (Scotland) Regulations 2023, when these regulations were prepared. No further assessments were required, as this order is a consequence of the 2023 regulations.

I have a couple of other questions that I should like to answer, which may help the noble Baroness with one of her earlier questions. I was asked when the Scottish Government would start and complete the transfer of individuals from carer’s allowance to the carer support payment. This may be helpful—I hope that it answers the question. From February 2024, the Scottish Government will begin the process of transferring the awards of around 130,000 people getting carer’s allowance in Scotland to carer support payments—it will be initiated by them. This will include around 40,000 carers with underlying entitlement only—carers who have entitlement to carer’s allowance but are receiving another overlapping benefit instead. Case transfer is a joint project between the Scottish Government and the DWP, which we intend to complete as soon as possible, while ensuring that the process is safe and secure. Case transfer for all disability and carer benefits remains on track to complete by the end of 2025.

The noble Baroness asked about similarities and differences in eligibility between the two benefits. I covered some of that in my opening speech, but this might answer one question that she asked. No one is eligible for the carer’s allowance who is not eligible for the carer support payment. That may be the succinct answer that she was looking for.

I hope that I have answered all questions. Again, as ever—with the number of questions that the noble Baroness rightfully usually asks—I normally look, and this case will definitely look, at Hansard, to be absolutely sure that I have answered them all. In the meantime, I beg to move.

Pensions Act 2004 and the Equality Act 2010 (Amendment) (Equal Treatment by Occupational Pension Schemes) Regulations 2023

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 14th November 2023 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for a very helpful introduction to these orders and particularly for explaining the background to the court cases, which will make reading Hansard for this debate a bit more comprehensible than might otherwise have been the case. I also thank my noble friend Lady Drake, to whose comments I shall return, and the noble Lord, Lord Palmer of Childs Hill, whose confidence in my determination to expose the detail and minutiae I trust will not be disappointed.

All these regulations are a product of Brexit, the gift that keeps on giving. I shall start with the draft Pensions Act 2004 (Amendment) (Pension Protection Fund Compensation) Regulations 2023—the other way around from the Minister. As we have heard, it was prompted by two court decisions: the Hampshire court judgment, whereby the ECJ found that former employees should get at least half the value of their accrued pension benefits if their employer was insolvent before they hit pension age, and Hughes, when the High Court disapplied the cap on PPF compensation for those below normal pension age on the date of the employer’s insolvency.

These regulations amend the Pensions Act 2004 to ensure that affected scheme members receive at least the minimum level of protection due under the Hampshire judgment and remove reference to the PPF cap. Also, interestingly, they clarify how the Hampshire judgment is being implemented by providing a calculation of PPF compensation by reference to a one-off valuation, as approved by the Court of Appeal in Hughes.

As has been noted, action is needed because, under Section 4 of the European Union (Withdrawal) Act 2018, the principles of EU law will sunset at the end of this year and cease to have effect, including where the position has changed as a result of court cases, which is very relevant to us today. The purpose of these regulations is to ensure that the effects of the Hampshire and Hughes judgments will be preserved in domestic legislation. Could the Minister confirm for the record that nothing will change from the current position once these regulations take effect and the relevant EU retained law has sunsetted?

Secondly, paragraph 10.1 of the Explanatory Memorandum reports that the DWP met with a cross-section of representatives of the pensions industry to seek views on its proposed response to the Hampshire judgment. There was broad support for retaining the effects of the judgment—but anybody who has worked in government will know that “broad support” can cover quite a range of views being expressed in the room. Out of interest, was there any opposition to retaining the effects of the Hampshire judgment and, if so, on what grounds? I am just interested in who was in the room.

I have read the draft Pensions (Pension Protection Fund Compensation) (Northern Ireland) Regulations 2023, which look on the face of it to be identical to the regulations I have just discussed, but amending the Pensions (Northern Ireland) Order 2005 instead of the Pensions Act 2004. Can the Minister confirm for the record that the effect of those regulations will be the same as the other ones, but just in Northern Ireland rather than in Great Britain? When regulations are this technical, it is important for the Committee to hear from the Minister what the intention is rather than just taking my word for it—love of detail notwithstanding.

I turn to the draft Pensions Act 2004 and the Equality Act 2010 (Amendment) (Equal Treatment by Occupational Pension Schemes) Regulations 2023—these are not catchy titles. These regulations were also prompted by court cases. In the Allonby case—I take the Minister’s point that this is being retained only inasmuch as it relates to GMPs, not its broader findings—the ECJ found that an opposite-sex comparator was not needed to demonstrate discrimination, where that was caused by legislation. In the Walker case, the UK Supreme Court found on the basis of EU equality law that legislation could not allow occupational pension schemes to restrict survivor benefits for survivors of same-sex civil partnerships or marriages so that only contributions from 5 December 2005 matter, when these became possible.

Something the Minister said confused me a little. I think he said that the Government were restating the law to avoid and remove any ambiguity. From reading these judgments, I understood that their contents have so far been resting on retained EU law and that, when that sunsets, there will be nothing supporting them. I may have misunderstood, so perhaps the Minister could clarify that. I understood—or perhaps misunderstood —that these regulations were necessary because without them the contents of those court judgments would not be retained.

Presumably, the Government could have amended domestic law to bring it in line with all these judgments. We have had an awful lot of pensions Bills in the last year; presumably any one of them would have been a means for doing this. Can the Minister explain why that did not happen? Since retained EU law rights will sunset at the end of the year, we need changes to be made. These regulations amend the Equality Act to remove the need for an opposite-sex comparator and they amend the Pensions Act 2004 to introduce the same test for unequal treatment when members are entitled to payments from the PPF. They also amend Schedule 9 to the Equality Act 2010 to reflect the framework directive rights with which the legislation was deemed incompatible.

Will the Minister confirm for the record that the effect of these changes is to maintain the position we are in now, resting on retained EU law? Is the position of the survivors of all marriages and civil partnerships now the same, whatever the sex of either the surviving or the deceased member? Is everybody, in any civil partnership or marriage, in the same position, irrespective of the sex of those involved?

These regulations retain one form of protection, as my noble friend Lady Drake articulated, but still we are left with a significant gender pensions gap, an issue to which the House returns periodically. There are various contributory factors, including the carer penalty and the impact of the gender pay gap that means women are more likely to have lower pension contributions. What plans do the Government have for reforms to reduce the gender pensions gap more widely?

One of the contributory factors is the fact that women are less likely to be eligible for auto-enrolment, so will the Minister tell the Committee when the Government intend to implement the provisions of the Private Member’s Bill sponsored by the noble Baroness, Lady Altmann, which enabled the extension of auto-enrolment from age 18 and set contributions from the first £1 of earnings?

As far as I can tell, the draft Occupational Pension Schemes (Amendment) (Equal Treatment) (Northern Ireland) Regulations 2023 seem to mirror the provisions of the previous regulations but amend the Equal Pay Act (Northern Ireland) 1970 and the Pensions (Northern Ireland) Order 1995, instead of the Equality Act and the Pensions Act. Once again, can the Minister confirm that the effect will be the same, albeit just in Northern Ireland?

Finally, I am really interested to hear the Minister’s response to the question from my noble friend Lady Drake: given how close we are now to the end of this year, are there any other areas where DWP has been relying on retained EU law that will be sunsetted in a few weeks? A clear assurance to the Committee for the record would be very helpful on that point. I look forward to the Minister’s reply.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the three noble Lords who have spoken for their general support for these regulations. The noble Baroness, Lady Sherlock, was right when she alluded to there being an element of complexity but, if I may say so, all four of us have seen through that complexity. I appreciate the general support. Nevertheless, I am very aware that a number of questions were raised and, as ever, I will do my best to answer them, in no particular order.

The noble Lord, Lord Palmer of Childs Hill, asked about the WASPI. I understand exactly why he raised that. He will probably expect the only answer that I can give: we are not able to comment on the status of the WASPI at the moment because, as he will be aware, there is an ombudsman investigation ongoing. He has probably heard me say that in the Chamber before; I wish I could say something different, but I am afraid I cannot go any further.

--- Later in debate ---

[Baroness Sherlock (Lab)]

On that last point, the Minister mentioned the Private Member’s Bill, but my question was actually about when the Government were planning to implement its provisions—perhaps he could give me a steer on that. I would be grateful if he would read Hansard because, if he thinks that he has answered the questions, I perhaps did not shape them as precisely as I had intended. Could he have a look at that and then come back to me?

[Viscount Younger of Leckie (Con)]

Most certainly— I am grateful that the noble Baroness has put me right on the precise question. I knew what she was asking at the time. On the timing and where we are with the rollout of the Private Member’s Bill, I do not have that to hand—actually, it has been handed to me, so perhaps I do; it is one I prepared earlier. The consultation on implementation is coming soon—I am aware that a consultation comes out of that Private Member’s Bill—but, in terms of actual dates, I am afraid I cannot go any further. But I hope that that directly answered that particular question. I feel that a letter is due. A lot of questions were asked about exactly how this should be, and I pledge to answer them all fully if I have not done so this afternoon.

Health: Migraines

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 24th October 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

The noble Lord, who has more experience in these matters than me, is quite right. My understanding is that, where an employee suffers from migraine, if the employer does not take it seriously or make certain allowances, this has a great detrimental effect on the employee. The noble Lord will know that the law says someone is disabled if they have a physical or mental impairment that has a

“substantial and long-term adverse effect”

on their

“ability to carry out normal day-to-day activities”,

including work. There is work to be done engaging more with employers to make sure they have that understanding.

[Baroness Sherlock (Lab)]

My Lords, can we clear that up? The Migraine Trust has had many sufferers saying they have been discriminated against at work. Some are forced into part-time jobs or even out of work. Given that the top triggers for migraine in the workplace include lighting, noise, stress, screens—things that employers could control—is the Minister concerned that, according to a Migraine Trust survey, over half of people affected said their employer had not made reasonable adjustments for them to stay at work, even though, as the Minister has just said, the law requires them to do that? What does he have to say to that?

[Viscount Younger of Leckie (Con)]

The noble Baroness is completely right. This follows on from my answer to the noble Lord. It is very important that employers get the message that they must make reasonable adjustments. It also brings into question whether someone should say that they are suffering from migraines when, for example, they go to an interview. Nobody has to tell their employer or potential employer that they are disabled, where that would be the right word to use. As I have said, more work must be done to ensure that employers have a greater understanding. It is of course in their interests to do so because, with that understanding, the employee’s productivity will be greater.

Employment and Support Allowance

Debate between Viscount Younger of Leckie and Baroness Sherlock

Wednesday 18th October 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

I have listened very carefully to my noble friend and have every sympathy. It might help to know that we are looking very carefully at the descriptors for those who are disabled and who may or may not be able to return to the workplace or even take up work. Those descriptors, as part of the WCA, are being particularly considered in terms of the focus on mobility, continence and social engagement. A lot of work is going on in this area; it is being done at pace but also with a great deal of empathy and care.

[Baroness Sherlock (Lab)]

My Lords, let me follow on from what the noble Baroness, Lady Browning, has very movingly said. As the noble Lord, Lord Young of Cookham, described, we are now in a position where those who are out of the labour market long-term because of ill health are the single biggest challenge facing our economy. Whenever we have this conversation, the Minister mentions different initiatives. However, as we now have 2.6 million people who are out of the labour market long-term, and we know that, for example, 23% of them want a job, that is 600,000 people who are desperate to get back to work but need appropriate help. Instead of having a series of schemes, is it not time to make sure that the core DWP, jobcentres and all the staff understand what they are dealing with when it comes to applications and to helping people to get back to work? The country needs it, and so do they.

[Viscount Younger of Leckie (Con)]

That is exactly what we are doing. We have been recruiting at pace more experts for the jobcentres and, as the noble Baroness will know, are consulting on the conditionalities and descriptors. It is quite right that we engage with the public and other stakeholders to make sure that we get this right. She will know that the WCA focus is a more rapid matter compared to the National Disability Strategy, which is a much more long-term thing. We are taking this very seriously; she is quite right to point this out, but a lot is going on and it will lead to results.

State Pensions: Canada Free Trade Agreement

Debate between Viscount Younger of Leckie and Baroness Sherlock

Wednesday 18th October 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

My Lords, whether there are brackets or not, obviously I will need to go back and check myself what the website says. As I say, people move abroad for many reasons and, before they do so, I am certain that they look at all the pros and cons. It is also their responsibility to take advice and make an informed decision before they move. However, I hope it gives some reassurance that there is information—I hope it is not limited—on GOV.UK as to what the effect of going abroad will be on entitlement to UK state pensions. That is, as I say, just one factor that people will be bearing in mind when making that decision, difficult or otherwise, to move from the UK.

[Baroness Sherlock (Lab)]

My Lords, to come back to Canada for a moment, this was quite an issue in the Canadian media—I am sure the Minister has read the cuttings—but is he aware that last year the Canadian media reported on a woman who got a letter from the DWP telling her that her pension was being stopped and there was no right of appeal? The reason was that she had failed to reply to a letter demanding she return a certificate proving she was still alive. It then turned out that this had happened to thousands of people, none of whom had got the letter. The Canadian media reported that the DWP blamed the Canadian postal system, but this must be a challenge: if you never get a letter, you do not know you are meant to reply to it. You cannot send the certificate back, then you get a letter telling you your pension is over and you cannot appeal, and the DWP will communicate with you only by post. Has this been resolved and how can future pensioners be sure they do not get caught the same way?

[Viscount Younger of Leckie (Con)]

I cannot deny that the noble Baroness makes a very good point. I will certainly go back and look at the specific case she has raised. I think she is saying that it extends to others, and I will certainly look at that. As far as I am concerned, the Government should be—and I will check on this—making every communication available for individuals who are seeking to move abroad, particularly to Canada, to have as much of the correct information as possible that they need in order to make all the decisions to make that move.

Pensions (Extension of Automatic Enrolment) (No. 2) Bill

Debate between Viscount Younger of Leckie and Baroness Sherlock

3rd reading
Monday 18th September 2023 Lords Chamber

[Baroness Sherlock (Lab)]

I thank the noble Baroness, Lady Altmann, for piloting the Bill through this House and I share her thanks to the Minister and his team, and all noble Lords who participated. Auto-enrolment is a much-loved child with more than one parent. As the noble Baroness said, the work came from the Pensions Commission, set up by the last Labour Government and on which my noble friend Lady Drake and the noble Lord, Lord Turner, served with such distinction. The coalition Government implemented it in 2012, and there has been a welcome growth as a result in the number of people saving for a pension. We can all celebrate that—but, as we noted at Second Reading, pensions adequacy is still an issue, so we need to look at continually improving auto-enrolment and addressing the question of the gender pensions gap, which remains a matter of serious concern.

This simple, permissive Bill would allow the Government to make progress in fulfilling their commitment by implementing some of the 2017 review measures, namely reducing the lower age limit for being auto-enrolled and removing the lower earnings limit. The Minister confirmed at Second Reading that the Government were still committed to doing that in the mid-2020s. Without wishing to be depressing, as 2023 begins its descent towards the sea, I wonder if the Minister can give us any hint as to whether 2024 might be the year, or is this gently rolling into the grass beyond the election?

The Opposition fully support this Bill. I thank again all those involved in proposing it and look forward to its passage.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I, too, congratulate my noble friend Lady Altmann on piloting this excellent Bill to its final stages. As I said at Second Reading, it has the full backing of His Majesty’s Government, and I am pleased to reiterate that support today. As the noble Baroness, Lady Sherlock, has just said, the 2017 review measures will see hundreds of thousands more young workers brought into workplace pensions for the first time. Alongside this, 2.5 million existing savers will see their pension contributions grow. Removing the lower earnings limit will mean that every worker will be paying pension contributions from their first pound of earnings and benefit from an employer contribution. Overall, an extra £2 billion-worth would be saved a year.

I am grateful for the constructive scrutiny of the Bill from noble Lords on all sides of the House. I acknowledge the thoughtful interventions at Second Reading of the noble Baronesses, Lady Sherlock and Lady Drake, and the noble Lords, Lord Palmer of Childs Hill and Lord Davies of Brixton. If the House agrees to final passage today, the Government will look to play their part by consulting on how to implement the expansion of automatic enrolment at the earliest opportunity, which I hope gives some idea of the timescale to the noble Baroness, Lady Sherlock. We hope that it could be later this year. We will then report to Parliament about how we intend to proceed in accordance with the provisions in the Bill. I am very pleased that there is cross-party support for my noble friend’s Bill, and I hope that this House will agree to its final passage today.

Work Capability Assessment Consultation

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 5th September 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

I begin by thanking the noble Lord, Lord Palmer, and the noble Baroness, Lady Sherlock, for their points. The way I read it is that the consultation has broadly been accepted, but I understand that a number of questions have been raised and I will do my best to answer them.

First, there is some agreement that it is very important to support disabled people and to give them every opportunity, if they are not in work, to find a way of getting into it or to prepare for it. Hopefully, there is agreement to that extent. The noble Baroness, Lady Sherlock, is absolutely right that no one should be shut out of the workplace. We are at the forefront in wanting to do more to ensure that disabled people who want to and can work are able to do so. However, some disabled people may not be able to work; we are a compassionate country and it is important to make the point that, where they are generally unable to work, the state should step in and support them, as it does at the moment.

I take issue with what the noble Baroness said about the intention and scope. We believe that it is an important measure to look at the conditionalities during this eight-week consultation, because it is important to move quickly. It is part of a whole package of measures that the Government have taken and continue to take for the disabled, which includes, as the House will be aware, the national disability strategy and the disability action plan. I will expand on that to try to be helpful. By the way, the sole intention is not to do with figures —there is no target; it is not to do with that at all; it is to look more closely at who in the disabled diaspora might be willing to work and how they can be encouraged and helped into work or preparing for work.

To pick up a point from the noble Lord, Lord Palmer, as he will know, the consultation is inviting comments on the four descriptors: mobilising, continence, getting about and coping with social engagement. As the House will know, people are referred for a WCA when they report a health condition or disability which may prevent or limit their ability to work or undertake work preparation activities. Currently, the activities do not take account of somebody’s ability to work from home, as the Statement said. We have identified some activities as the most likely to be affected by modern changes in the workplace, including working from home and better support and understanding from employers around how to overcome barriers to work for disabled people and people with health conditions. To that extent, we are moving more quickly and offering this targeted approach as part of the consultation.

On our broader support, I remind the noble Baroness that we announced £2 billion at the Spring Budget 2023 to support disabled people and people with health conditions into work, including through WorkWell and universal support. We also increased our support offer to help people move back into work when they can with additional work coach time.

I will set out some figures for the House. Roughly 700,000 new benefit claimants go through a work capability assessment each year and we are seeing around 450,000 determined as having limited capability for work-related activity. Hopefully, that gives some scope of the population we are working within. Clearly, if we helped just 10% of that cohort, around 45,000 more people per year would be placed in a group in which they would receive the necessary help to get into employment.

[Baroness Sherlock (Lab)]

I do not think the Minister answered some of the questions I asked—maybe he omitted to do so. I asked about the timing and whether a shift away from the higher rate to the lower rate would have any implications for the amount of money somebody got, for example. Did he miss those questions?

[Viscount Younger of Leckie (Con)]

This is unusual procedure. On the timing, I made it clear in the Statement that we will work through this consultation and receive the results. In terms of the results coming through, I mentioned 2025. I will certainly look at the other questions the noble Baroness raised and write to her, although I think there were probably just one or two.

Child Support (Enforcement) Bill

Debate between Viscount Younger of Leckie and Baroness Sherlock

3rd reading
Friday 14th July 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Redfern, for piloting the Bill through this House and, along with the rest of the House, wish her a speedy recovery. I also thank the noble Baroness, Lady Pidding, for standing in for her today so crisply and effectively. Thanks are due too to the Minister and his team, both for their work on this Bill and for their briefing of Peers to help us understand the context in which it sits. I am grateful also to Gingerbread and the charities that work so hard in this area.

We on these Benches wholeheartedly support the principle that non-resident parents should pay child maintenance and that there should be enforcement for those who fail to pay. The Bill should make a small but welcome contribution to that end by speeding up the process by which the non-resident parent who is in arrears can be made to pay what they owe. I hope that in future, we will see a further reduction in the amount of child maintenance that goes unpaid. There is still work to be done to increase compliance with the child support regime and to ensure that it becomes the norm that both parents continue to support their children, whatever happens to their relationship with one another.

For now, I simply thank again the noble Baroness, Lady Redfern, and Siobhan Baillie MP, and wish the Bill well.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I congratulate my noble friend Lady Pidding, speaking on behalf of the main sponsor of the Bill, my noble friend Lady Redfern, on ensuring that the Bill has reached its final stages. I wish my noble friend Lady Redfern a speedy recovery.

As mentioned at Second Reading, the Bill has the full backing of His Majesty’s Government, and it gives me great pleasure to speak in support of it today once again. I also thank the noble Baroness, Lady Sherlock, for the thoughtful questions she raised at Second Reading. I hope the letter I sent in response has provided her with some clarity on the issues raised. I very much take note of her comments today.

This Government are committed to improving the support the Child Maintenance Service offers to separated families, so the Bill makes important improvements to CMS enforcement processes by amending existing powers. Once commenced, this will allow the Secretary of State to make an administrative liability order where the paying parent has failed to pay an amount of child maintenance, without the need to make an application to court.

On the point raised at Second Reading by the noble Lord, Lord Palmer, who is not in his place, I would like to reassure the House that the central protections for paying parents will be provided through secondary legislation. This will give parents the right of appeal, while setting out some parameters around the appeal process. First, this will include the period within which the right of appeal may be exercised, and, secondly, the powers of the court in respect of such appeals. Secondary legislation will follow the affirmative procedure, so your Lordships will be able to debate the proposals eventually when they are put forward.

To conclude, I am very pleased that there is cross-party support for my noble friend’s Bill, and that this House will agree to its final passage today.

Pension Funds: Investments and Tax Relief

Debate between Viscount Younger of Leckie and Baroness Sherlock

Thursday 29th June 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the Climate Change Committee has just reported that the Government are missing climate targets on nearly every front, which makes it all the more disappointing that they opposed a recent Labour amendment to the Financial Services and Markets Bill that would have required the Treasury carefully to review the case for pension funds investing in green infrastructure while maintaining the soundness of funds. Can the Minister tell the House why?

[Viscount Younger of Leckie (Con)]

No, I cannot, but I can say that the introduction of TCFD reporting requirements for pension schemes was pioneering. We are a leader in this field. As I say, these regulations are still very new and there is a lot going on in this space, and we will be reporting by the end of the year.

Child Support Collection (Domestic Abuse) Bill

Debate between Viscount Younger of Leckie and Baroness Sherlock

3rd reading
Friday 16th June 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Farmer, and congratulate him on having brought the Bill to fruition in this House. I add my thanks to the Minister and his team for having supported it, to the honourable Lady, Sally-Ann Hart, who piloted it through the other place, and to the charities, such as Gingerbread, which put so much work into supporting parents in this area.

Although this is a brief and focused Bill, it achieves one incredibly important task: it enables parents who have experienced domestic abuse to use the Child Maintenance Service without having to communicate directly with the abusive parent. It is a good example of how a Private Member’s Bill can do something quite specific but incredibly important to those affected by it.

We might have considered tabling some amendments to it, to explore some of the issues, but we want to make sure that the Bill reaches the statute book in this Session. I am very conscious that it is six years since Emma Day was murdered by her ex-partner. He threatened her life if she chased him for child support, and when she pursued a claim for child support, he stabbed her to death. I hope that those who still mourn Emma to this day will see the Bill, and the work of the noble Lord, Lord Farmer, and others, as a small step forward in protecting those who face domestic abuse in our time.

The absence of a Committee stage prevented me from following up on one specific question I asked at Second Reading, which the Minister missed the opportunity to answer. In Committee in the Commons, the Minister, Mims Davies, said:

“Full consideration is being given to exempting victims of domestic abuse from collection charges”.—[Official Report, Commons, Public Bill Committee, 14/12/22; col. 9.]


Can the Minister, either now or in writing, tell the House where that consideration has got to?

For today, we are pleased to offer our support for the Bill, and we wish it fair speed.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Baroness, Lady Sherlock, for her support for my noble friend’s Bill. I will most certainly write a letter to her, over and above the letters I have already written to her, which I hope she has received.

I am grateful to my noble friend Lord Farmer for presenting his Bill to the House, and to my honourable friend Sally-Ann Hart for introducing the Bill and guiding it through its stages in the other place. I am also very grateful to the Minister for Social Mobility, Youth and Progression for her support.

I remain very grateful to Dr Samantha Callan for conducting the independent review of the ways in which the CMS supports victims of domestic abuse, and for her excellent report. As your Lordships are aware, Dr Callan’s report includes a recommendation to enable cases to be moved to collect and pay where there is evidence of domestic abuse—precisely what this Bill aims to do.

To ensure that the Bill targets parents appropriately, the types of domestic abuse evidence that will be required will be set out in secondary legislation. This will reassure not only the noble Baroness, Lady Sherlock, but my noble friend Lord Farmer in particular. We will engage with stakeholder groups, other government departments and the devolved Administrations, where appropriate, to ensure that appropriate processes are established for verifying evidence of domestic abuse.

I hope that the whole House will join me in supporting my noble friend’s Bill and agree to the final stages of its passage.

Food Price Rises: Impact on Low-Income Families

Debate between Viscount Younger of Leckie and Baroness Sherlock

Thursday 25th May 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the reality is that food is now the new energy; but it is worse, because households spend more of their budgets on food and it is not cheaper in the summer. In fact, it is worse, because the kids do not get free school meals. Food price inflation of 19% is a disaster for poor families. The Minister will know—because he has read the evidence—that those on low incomes, even in work, are already buying own-brand supermarket goods; they are already skipping meals; and they are already going to food banks. There is nowhere else for them to go. Is any thinking going on in the Government as to what they will do right now to help those families this summer?

[Viscount Younger of Leckie (Con)]

Of course, the noble Baroness is right. I said at the beginning that much work is going on with regard to interaction with the supermarkets. A number of supermarkets have some urgent initiatives on the go. For example, ASDA has invested £73 million, allowing it to drop and lock prices for over 100 household products. The prices of these products were dropped by 12% on average and will remain this way until the end of the year. Morrisons has similar initiatives: it has cut prices on more than 500 products. It is more than this, and the noble Baroness will know that it is not just the UK. There are other countries, including Germany, where food price inflation remains high, at around 18% or 19%.

Carers: Financial Support

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 16th May 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

I am very aware that some carers are extremely young, and I say again that I recognise the role of unpaid carers. The carer’s allowance is not intended to be a replacement for a wage or a payment for caring services, so we cannot compare it to the national minimum wage or the national living wage, for example. The noble Baroness raises another important point that we should continue to look at.

[Baroness Sherlock (Lab)]

My Lords, universal credit is a replacement for a wage, and there are people on it who can work only part time because of the need to care for a loved one, and, in some cases, because they simply cannot get hold of formal social care any more —things are pretty tough at the moment. They are not automatically excluded from the requirement to look for full-time work while on universal credit, so what guidance is given to universal credit work coaches in those circumstances?

[Viscount Younger of Leckie (Con)]

The guidance is continually updated for them. The noble Baroness will be aware of the link between the carer’s allowance and the universal credit tapering system, so that, if tapering is involved, you receive 55p for every £1.

State Pension Underpayment Errors

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 16th May 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

Indeed, and it is very important that we engage much more closely with the customer base. Where underpayments are identified, the DWP will contact the individual to inform them of any changes to their state pension amount and of any arrears involved. There is now, I am pleased to say, a more direct route for those inquiring about underpaid state pension. Guidance on this, the House may not be surprised to hear, is on GOV.UK and went live in July last year.

[Baroness Sherlock (Lab)]

My Lords, these cases are very urgent for some people; 25p may be an issue for the over-80s, but in just January and February 14,500 over-80s were found to have been underpaid—out of a total of 46,000 underpayments. The worst affected were those who had been widowed, who were underpaid by, on average, £11,500. We all know how quickly the DWP will go after you if you get overpaid, so can the Minister assure us of two things? First, is priority being given to those who most need the money and who, frankly, may need it rather more urgently for reasons such as more advanced age? Secondly, the NAO suggested in its very damning report that the department assess all underpayments to see whether there is a systemic cause which might affect other cases. Is that now being done?

[Viscount Younger of Leckie (Con)]

Very much so; it is being done. I think I alluded to this earlier. Any systemic problem has to be looked at as a matter of urgency. On the other question the noble Baroness raised, I mentioned the number of extra people we have put on to this particular case. I reassure her and the House that the data shows that we have reviewed an average of more than 15,000 cases per month between November 2022 and February 2023, compared with an average of only 5,000 per month over the first 22 months of the exercise.

Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) (No. 2) Order 2023

Debate between Viscount Younger of Leckie and Baroness Sherlock

Wednesday 26th April 2023 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords who have spoken, especially my noble friend Lord Davies of Brixton for giving us this opportunity to reflect on the role and operation of the Pension Protection Fund.

My noble friend Lady Drake was right to remind the Committee of the huge value of the PPF to the thousands of members of DB schemes—both those who benefit directly from the £1 billion-plus of compensation it pays out every year and those who are happily sailing in calm pension waters but benefit from the security of knowing that the lifeboat is there, should they find they need it. Certainly, every day is a school day. I have learned a certain amount of history today, for which I thank noble Lords who have spoken, including the noble Baroness, Lady Altmann, and my noble friends on this side. They reminded me that the PPF was created by the Labour Government to protect the hard-earned pension savings of workers. It is important that we never take it for granted and that we, in our time, do all we can to keep it sustainable.

The Pensions Act 2004 requires the DWP to make an annual order to increase the PPF levy ceiling in line with the growth in earnings. As my noble friend Lord Davies noted, this year we have had two orders, as the first draft omitted the relevant figures in favour of “X”s. I do not want to make life harder for whichever poor person found that they had done that by accident, but I have to note that it is not the first error in recent times that we have had in a DWP order. When I was a non-exec on boards, we were always told that if an error is reported, the question to ask is: is it systemic? Clearly, one error is not systemic, but this is not the first. Can the Minister tell the Committee whether he is confident that his department is sufficiently well resourced with the people whose job it is to draft legislation and make sure that it is checked before it goes out?

The levy ceiling was set in primary legislation to be uprated annually in line with the growth in average weekly earnings, the rationale being that this would allow the increases in the ceiling roughly to track the increases in the pension liabilities of DB schemes, which are, in turn, linked to members’ earnings. In its 30th report, the Secondary Legislation Scrutiny Committee asked whether the policy of annual increase by the growth in earnings is still producing a sensible outcome, or whether it is far outstripping actual usage. It highlighted the gap between the levy ceiling and the actual levy. As we have heard, in 2023-24, the levy will be 16% of the ceiling, compared with 33% in 2022-23 and 43% in 2021-22.

The answer provided to the committee in that 30th report was that

“PPF investment performance has consistently performed ahead of target and combined with the PPF’s levy collection and risk reduction strategies, has resulted in a reserve of £11.7 billion and assets of £39 billion (as of 31 March 2022)”—

as mentioned by my noble friend Lord Davies. It was this which enabled the drop in the levy. The recent PPF funding review concluded that

“the PPF’s financial position has significantly strengthened in recent years, driven principally by strong investment performance, and a changed risk profile. As a result, the PPF is making a step change in its approach and entering a new phase where the focus will shift from building to maintaining its financial resilience”.

As somebody who likes the Janet and John version, I think that means that it has been building up reserves steadily and feels that the time has come to build them up more slowly in future.

The challenge for the PPF is that it has to tack a course between levying enough for its likely needs in the year ahead while ensuring that it is still able to bring in enough additional revenue if it suddenly faces large claims or a significantly riskier environment. Since it can increase the levy by only 25% a year, the decision on the levy can never just be a short-term consideration with a 12-month horizon. Is the Minister confident that the PPF has landed in the sweet spot?

I am also interested to hear the answers to the questions raised by the noble Baroness, Lady Altmann, and my noble friend Lady Drake about the consideration that is being given by the department and the PPF as to whether there is a need for more flexibility in the way that the levy is set and constructed.

Clearly, if the PPF is deemed to have more reserves than it needs, it can do one of two things: reduce the levy or spend more. My noble friend Lord Davies has come down clearly on one side of that, namely that it should choose to spend more. He rightly pointed out that this is a time of very high inflation and, therefore, the impact of the 2.5% cap on indexing is being felt particularly acutely at the moment. Clearly, that has put pressures on all pensioners, including those who rely on PPF payouts. My noble friend’s proposal has attracted support in principle from the committee. The obvious question to the Minister is: has any modelling been done on the cost of removing or raising the cap and, if so, what can he share with us on that—what did it show?

My noble friend Lord Davies also raised two of the questions from the independent review of the PPF. Can the Minister tell me whether the Government have responded to that review? I could not find it, but that may just be because of my search skills. Perhaps he could let us know.

I add another question that had been raised. The costs of administering the PPF are borne by the PPF administration fund and amounted, I gather, to £13.3 million last year. The independent review recommended folding the administration levy into the general PPF levy. Did that proposal find favour?

I am interested to hear the Minister’s take on this delicate balance facing the PPF, especially as it matures. It has been suggested that is in a healthier position than ever, but also that, as more schemes prepare to move into buyouts, the environment could get riskier in future than it has been in the past. It is perhaps time for more of the workings to be made manifest so that there is more clarity for all stakeholders—pension schemes, savers and pensioners—as to the balance of decisions that are being taken. I look forward to hearing the Minister’s reply.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I thank the noble Lord, Lord Davies of Brixton, for providing this opportunity to discuss the Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) (No. 2) Order 2023. This order enables the board of the Pension Protection Fund to raise a pension protection levy that is sufficient to ensure the safe funding of the compensation it provides, while providing reassurance to business that the levy will not be set above a certain amount in any one year.

I thank all noble Lords who have spoken in this short debate. As ever, I am somewhat daunted by the level of expertise, bar none, in this Committee. A good number of questions have been raised and, as ever, I will endeavour to answer them all—mostly at the end of my remarks, just to manage expectations.

I emphasise the Government’s continued commitment to supporting pensioners and protecting their hard-earned retirement savings. Ensuring that those who have worked hard all their lives receive a retirement income that provides them with dignity and financial security is one of our core objectives, and so it should be. We recognise that recent increases in the cost of living have placed particular pressure on pensioners’ household budgets, so we are taking action to target support specifically at pensioners. Around 12 million pensioners in Great Britain will benefit from the 10.1% increase to their state pensions from this month, fulfilling the Government’s manifesto commitment to apply the triple lock. More than 8 million pensioner households across the UK will receive an additional £300 cost of living payment this winter. To aid the most vulnerable, the pension credit standard minimum guarantee has also been increased by 10.1%.

As the Committee will know, combating inflation is one of the Government’s top priorities. Forecasts indicate that inflation is still likely to fall sharply by the end of 2023, in line with the Prime Minister’s pledge to reduce it by half by the end of the year.

I will return to the Pension Protection Fund in a moment, but first I will take a step back to consider the wider context of the schemes it protects. I pay tribute to the noble Lord, Lord Davies, for all that he has done; I was interested, pleased and perhaps not surprised that he had such a hand in the naming and setting up of the PPF—I am not sure of the precise date—back in the 1990s. With around £1.7 trillion of assets over 5,000 schemes and supporting nearly 10 million members as of March 2022, the defined benefit sector is critical for the UK population.

Set against this backdrop, the PPF’s £39 billion in assets under management as of March 2022, including £11.7 billion in reserves, certainly seem proportionate to the scale of its task. As of March 2022, since its inception in 2005 the scheme has stepped in to protect close to 300,000 members who might otherwise have received a greatly reduced retirement income. The noble Baronesses, Lady Drake and Lady Sherlock, referred to the success of this.

Despite the strength of its financial position, the PPF continues to face risks, the biggest being future claims for compensation and increased longevity. It uses its stochastic modelling tool, the “long-term risk model”, to help determine the funding it requires to protect against these future risks. Like other major financial institutions, the PPF protects against risk by holding reserves. The size of its reserve should therefore provide reassurance not only to existing members of the PPF but to members of all eligible pension schemes.

The noble Lord, Lord Davies, asked about the Pension Protection Fund’s reserve of £11.7 billion and asked whether that could be shared with its members—I think that was the gist of his question. It enables the Pension Protection Fund to protect financial security for current and future members. As I said, despite the strength of its financial position, the PPF continues to face a number of risks, the biggest being future claims to compensation and increased longevity, so there is a balance that I am sure the noble Lord could tell me much about.

The compensation provided by the PPF makes it a critical partner in delivering on the Government’s objective of ensuring financial security for pensioners. The PPF provides a crucial safety net to members of eligible pension schemes who are at risk of losing their pensions because of the insolvency of their employer. This safety net could not be more important in these challenging times.

I reiterate, however, that the Pension Protection Fund is therefore a compensation scheme; I know that my noble friend Lady Altmann defined it as an insurance scheme, which is fair enough. As such, it seeks not to replicate the benefits of underfunded pension schemes but rather to ensure that members are compensated fairly and sustainably. A balance must be struck between the interests of those who receive compensation and the levy payers who fund it. It is only by striking this delicate balance, perhaps, that the long-term stability of the PPF can be ensured.

Pensions Dashboards (Prohibition of Indemnification) Bill

Debate between Viscount Younger of Leckie and Baroness Sherlock

3rd reading
Friday 21st April 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I congratulate the noble Lord, Lord Young of Cookham, on piloting the Bill through the House with his usual flair, and it is very nice that we can all be here to see it on its way. It is a narrowly focused Bill which simply addresses a lacuna in the original legislation, and we are happy to support it. I also thank the noble Viscount for giving us an assurance at Second Reading that before long, we can look forward to an update on the likely implementation of the pensions dashboards themselves. It remains of paramount importance that people can save for their retirement with confidence and with an understanding of all the implications of the choices they are making or that have been made on their behalf. We support the creation of a pensions dashboard to contribute to that goal, although we will continue to debate with Ministers choices about how it can best be done. For today, we are pleased to wish this Bill on its way.

[Viscount Younger of Leckie (Con)]

My Lords, I, too, am grateful to my noble friend Lord Young of Cookham for presenting his Bill to the House, and to my honourable friend in the other place, Mary Robinson, for her skilled stewardship of the Bill. It is a pleasure again to offer my support for the Bill on behalf of the Government. I, like my noble friend, also thank all noble Lords who were present for Second Reading for their interest in the Bill and for supporting it as it moved towards its final stage.

I committed to follow up on the topics relating to this Bill and questions about pensions dashboards more broadly that were raised by noble Lords during the previous debate. I have placed copies of letters I sent after Second Reading in the House Library, and they are also available on the Bill’s webpage—hopefully, noble Lords have had a look at them. I hope the letters sent have helped to address these queries, which included asking for an update on progress on the department’s state pension records correction exercise, the readiness of public service pension schemes to connect to dashboards, and whether penalties could be incurred for loading incorrect data to pensions dashboards. Queries were also raised more specifically about the penalties which could be imposed on trustees and managers of occupational pension schemes under the proposals in the Bill, and for compliance breaches under the pensions dashboards regulations.

I further addressed questions about the challenges faced by the pensions dashboards programme in delivering the digital architecture underpinning pensions dashboards. On this final point, I made clear to the House during Second Reading the importance of this Bill, and that it is needed irrespective of the delivery timeline for pensions dashboards. To be helpful to the noble Baroness, Lady Sherlock, I also pledged—and I stick to that pledge—to update noble Lords as soon as is reasonably possible, and an invitation will be forthcoming.

To reiterate why the Bill is required, it corrects a legislative gap which, left as it is, means that no provision would prohibit trustees or managers from reimbursing themselves using pension scheme assets to pay penalties in respect of breaches of any relevant pensions dashboards regulations. There was unanimous agreement among noble Lords at Second Reading that this would be unacceptable.

The proposals under this Bill seek to deter rogue actors from reimbursing themselves using the assets of pensions scheme members by allowing criminal proceedings to be brought against trustees or managers of occupational pension schemes if they are reimbursed and knew or had reasonable grounds to believe that they had been reimbursed as such. If a trustee or manager is found guilty of this offence, the Bill’s provisions allow for a maximum sentence of up to two years in prison, or a fine, or indeed both.

As I emphasised at Second Reading, the Bill does not place any new requirements on trustees or managers of occupational pension schemes or burden them with additional costs. It simply extends an existing prohibition in Section 256 of the Pensions Act 2004, which already applies to a number of areas of pensions legislation, to include pensions dashboards.

To conclude, the Bill rightly increases protection for consumers saving for their retirement. I do hope, therefore, that the whole House will join me in its support for my noble friend’s Bill and agree to its passage.

Heritage Railways and Tramways (Voluntary Work) Bill [HL]

Debate between Viscount Younger of Leckie and Baroness Sherlock

3rd reading
Friday 21st April 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I add our thanks to my noble friend Lord Faulkner, who has piloted the Bill. I regret that I could not find a relevant interest to confess at this point, but I commend those who have. I add my hope that Lady Forsyth has a forgiving nature when she comes to read Hansard.

Our heritage railways are a joy and a blessing to the nation, as well as a big contributor to the economy. It would certainly be a shame if children and young people were prevented engaging safely in voluntary activity down to legislation from a time when heritage railways were simply railways. In the earlier stages, the Government seemed confident that there is no legislative barrier. That is not completely accepted around the table, so I hope that the Minister is able to give some reassurance to my noble friend and that discussions are carrying on to make sure that this can happen. I am happy to wait to hear what the Minister has to say.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am also grateful to the noble Lord, Lord Faulkner, for bringing this debate to the House for the fourth time, for which he is to be applauded. I agree with him that it is important to protect heritage railways for future generations.

Modern health and safety legislation—in particular the Health and Safety at Work etc. Act 1974 and relevant secondary legislation—does not prevent children and young people volunteering on heritage railways or tramways. The current legislative framework already allows for this to happen. However, it is important that such activities are carried out in a safe way with employers, organisers and those supervising the activities making sure that any risks are properly controlled.

The Government support volunteers and volunteering; to that extent, I echo the words of my noble friend Lord Forsyth. It can be a rewarding experience for young people, and it allows them to gain new skills and make a difference in their community. Volunteering is vital for the future sustainability of the heritage rail sector, with more than 22,000 people, 800 of them young people, giving their time to support heritage railway organisations across the country.

At Second Reading, my predecessor, my noble friend Lady Stedman-Scott, offered to bring officials from the Health and Safety Executive, the Office of Rail and Road, the Department for Digital, Culture, Media and Sport and the noble Lord, Lord Faulkner, together with the Heritage Railway Association to discuss how its guidance can be further strengthened. Unfortunately, unforeseen circumstances prevented this meeting happening, but I would very much like to make this offer again.

Under the 1974 Act, duty holders are required to control the risks they create from their operation. Although the Health and Safety Executive has the policy responsibility for the 1920 Act, in the case of heritage railways, the Office of Rail and Road is the regulator for health and safety legislation. Both regulators have confirmed that they would not enforce the 1920 Act solely to prevent young people volunteering on heritage railways. It has not been used in a prosecution since 2009 and, when it was, it was used alongside more modern health and safety legislation to prosecute in cases where young people were employed illegally in dangerous environments. In total, the 1920 Act has been enforced on eight occasions since 1998, and none of these prosecutions was against a heritage railway.

The law protecting children in the UK is a complex area, and this Bill would have implications not only on health and safety protections but on education legislation and local authority by-laws. To repeal or amend the 1920 Act may initially seem the best course of action; however, because of the links to other legislation, the process of making changes would be extensive. There is no evidence that this legislative change would make a difference to the number of young people volunteering, and therefore it is not proportionate to proceed with it.

I promised also to be relatively short, so I conclude by saying that the Bill seeks to allow children to gain valuable experiences volunteering on heritage railways and tramways, and the Government support this aim. However, we believe that the current legislative framework does just that. Nothing would be gained from a change to legislation when other, simpler and more effective options are available—in particular, working with the regulators to explore the types of activities and tasks that are proportionate for young volunteers.

At Second Reading, the noble Lord, Lord Faulkner, remained concerned about what would happen should something go wrong with a young person working as a volunteer, and he wanted stronger guarantees in relation to the 1920 Act. I want to reassure him that if such an incident occurred, both the Health and Safety Executive and the Office of Rail and Road have confirmed that there would be a full investigation, taking account of the risks that the young person was exposed to and how they were controlled. The existing framework is fair and effective, which is why, unfortunately, the Government oppose the Bill.

Universal Credit

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 18th April 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

It is right to say that, although the Government are very aware of the severe issues at the moment, we do not look at every single essential item because we think that individuals and households have the right to spend how they like. The benefit cap, which is probably the gist of the noble Baroness’s question, provides a strong work incentive and fairness for hard-working tax-paying households, and it encourages people to move into work where possible. Let us not forget that households will still be able to receive benefits up to the value of gross earnings of around £26,500, or £31,300 in London.

[Baroness Sherlock (Lab)]

My Lords, of course households make their own choices, but the point of this report is that we all need certain things: somewhere to live, clothes to wear, food to eat and the ability to heat our homes. The suggestion is that there simply is not enough money in the system to do that. For most of the last decade, the Government have not uprated benefits by the rate of inflation, which results in a disconnect between the cost of living and what the social security system gives people to live on. Now, we are seeing poverty, destitution, homelessness and the use of food banks are all going up. Does the Minister think it would make a difference if benefits and tax credits were automatically uprated by inflation, rather than simply being down to what Ministers want to do that year?

Occupational Pension Schemes (Administration, Investment, Charges and Governance) and Pensions Dashboards (Amendment) Regulations 2023

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 28th March 2023 Grand Committee

[Baroness Sherlock (Lab)]

I thank the Minister for taking the time to answer those questions. I just want to ask him to explain the definition of an illiquid asset a bit more. He is right to point to Regulation 3(2)(d), which says that they are

“assets of a type which cannot easily or quickly be sold or exchanged for cash”.

I suppose most things can be sold or exchanged for cash reasonably quickly if you do not mind how much you get for them at a fire sale. I have two questions. If that means

“cannot easily or quickly be sold or exchanged for cash”

at a reasonable price, or at least at the price one had paid for them, would that apply to UK gilts last autumn? Secondly, the reason this matters is that there is a lot of money to be made from this definition. Where that is the case, the definition is likely to end up being the subject of some dispute. What is the mechanism to resolve this? Whose decision is it? Does someone just get to do it? Will the regulator push them, or will it end up in court? How will this be litigated?

[Viscount Younger of Leckie (Con)]

I hope I can be of some help. I think I should write a letter on this quite detailed question, as it takes us further from the question originally asked by the noble Lord, Lord Sharkey. Part of the answer could be—I will need to follow up with a letter—that we do not want to prescribe our approach too much. As I mentioned earlier, it will be very much up to the trustees and pension funds to decide for themselves. It might not be right to have too much prescription here, but I will go no further than that. The noble Baroness, Lady Drake, may know more than me, as one can go only so far with a definition. I will write to clarify further what we mean.

Charitable Sector: Food Provision

Debate between Viscount Younger of Leckie and Baroness Sherlock

Monday 27th March 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

My noble friend will not be surprised to hear me say that we are committed to action that helps alleviate levels of pensioner poverty. In answer to one of her questions, the HBAI statistics recorded that fewer than 100,000 pensioners were living in households where a food bank had been used. However, despite those figures, there is more to do.

The figures show that there are 200,000 fewer pensioners in absolute poverty than in 2009-10. Pension credit provides a vital financial support to pensioners. This is one of the actions that has been and is being taken by the Government, and it is proving to be very successful, with a 73% uptake in the last 12 months.

[Baroness Sherlock (Lab)]

My Lords, I am delighted that we are now asking about food bank use in the annual HBAI survey. That is great. But the results are really pretty shocking. For example, they showed that one in six of all people on universal credit used a food bank in the last financial year. When we think that, in the first half of that year, universal credit was £20 higher, furlough was still in place, inflation was 4% and energy bills were half what they are now, it begins to show the scale of the problem.

On 9 January, I asked the Minister what the Government were going to do about the shocking increase in food banks. He said that they needed to know more. Now that they do, what will they do about it?

[Viscount Younger of Leckie (Con)]

First, I welcome the noble Baroness back. It is good to see her in her place. To pick up on what she was saying, our newly published statistics on food bank use, alongside the broad suite of poverty data, will indeed help us to shape future policy considerations. There is much in these statistics—some good, some less good—and I assure the noble Baroness that we will look very carefully at them and use them to help us inform and impact on our policies.

Pension Schemes: Guidance

Debate between Viscount Younger of Leckie and Baroness Sherlock

Monday 13th March 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the report has said that, since the law was changed to require pension funds to do climate reporting as a way to nudge the companies and assets in which they invest to do better, two broad problems have emerged. First, the data out there are not consistent in timeframes or formats, or across asset classes or managers. Secondly, the regulatory regime seems to focus more on positioning pension funds than on the climate transition plans of the companies; as the report puts it,

“the world needs greening, not the pension fund”.

So will the Government look again at this?

[Viscount Younger of Leckie (Con)]

Not only will we be looking again, but this is an iterative process. As I have said, we are yet to come back on the report, One Year On, but we will come back soon. I also reiterate the fact that we are the lead in the world; I will have to check the figures from the noble Lord, Lord Teverson. For example, since our department introduced TCFDs, over 70% of occupational pension schemes—a value of £1.4 trillion—are now subject to climate disclosure, and over 80% of scheme members, some 20 million people, will be able to access their pension schemes’ disclosures on climate risks and see how they are being managed. That is being published for the first time.

Social Security Benefits Up-rating Order 2023

Debate between Viscount Younger of Leckie and Baroness Sherlock

Wednesday 22nd February 2023 Grand Committee

[Viscount Younger of Leckie (Con)]

My Lords, I start by thanking the Committee in general for its overall support for these regulations. I also thank various Peers, including the noble Baroness, Lady Lister, and the noble Lord, Lord Davies, who made some very kind remarks about me coming into this particular role; I appreciate it. I was more than prepared for the fact that a good number of questions would arise from these regulations, of which there are three; I will of course do my best to answer them.

Let me start, in what I hope is not too discordant a way, by taking some issue with what the noble Baroness, Lady Sherlock, said. There is no question that there is no way in which we have played fast and loose with this; that is a bit unfair. A huge amount of thought has gone into this. I think the Committee has acknowledged that we have moved in the right direction by raising many of these benefits by 10.1%.

[Baroness Sherlock (Lab)]

Let me just clarify: I was not suggesting that the Government played fast and loose this year. I was talking about previous years when they broke with uprating and did not uprate at all, not this year. I am sorry if I did not make that clear.

[Viscount Younger of Leckie (Con)]

That is fine; I accept that. I think we can leave it at that.

I will start by tackling a couple of issues that were raised by the noble Baroness, Lady Sherlock, towards the end of her speech. She made some good points that completely chime with what the Government think. We totally understand that a number of individuals are suffering as a result of the war in Ukraine, the pandemic and cost of living issues generally. I completely acknowledge that; I hope the Committee understands that.

Let me start on why childcare has not been included; perhaps I can help. Regardless of the number of hours that they work, eligible parents can claim back up to a generous 85% of their childcare costs each month, up to the maximum amount of £646 for one child and £1,108 for two or more children. The vast majority of UC claimants receiving a childcare element do not hit the UC childcare caps. In fact, between August 2020 and July 2021, 92% of universal credit claimants receiving a payment for the UC childcare element were eligible to receive the full 85% of their childcare before the earnings taper.

So we believe that our policy provides fairness in the welfare system between those receiving out-of-work benefits and those in work by putting in place a reasonable cap on the childcare costs that a household can have reimbursed through UC, in each assessment period. We believe that the childcare policy aligns with the wider government free childcare offer in England and our similar funded early learning offers in the devolved nations. We keep childcare under review. We know that childcare costs are extremely high; I am certainly aware of that. I cannot add anything more to that, only that the Committee should be aware that we are aware of these issues. I will stick with that.

Secondly, the noble Baroness, Lady Sherlock, raised a perfectly reasonable point about food back usage. I am aware from a previous Oral Question in the Chamber of various Peers’ strong concerns and the comments that have been made. I chime with those as well. As the noble Baroness knows, food banks are independent, charitable organisations and our department does not have a role in their operation. What she and the Committee should know is that we are looking to give some feedback from a series of questions posed by the Family Resources Survey. We hope that these will be published next month and will give the Government some idea about usage. It is very much our wish that food banks are not needed. We need to continue to work as hard as we can to look at the reasons behind their usage. We can all guess what they are; I have given some flavour of that this afternoon.

On the same theme, I will touch on inflation. This leads to a number of important points raised by noble Lords, in particular the extremely good point from the noble Baroness, Lady Lister, on the increase in food prices. We are all concerned about the price of certain food items rising particularly steeply. Like many countries around the world, and as the noble Baroness knows, the UK faces the challenge of high inflation. We will continue to provide support through cost of living payments, which have been well rehearsed in this Committee and in the Chamber, while increasing state pensions, benefits and the benefit cap levels by 10.1%.

To help the Committee, the CPI stood at 10.1% for the 12 months to January 2023, down from 10.5% in December. This monthly decline was principally driven by lower rises in motor fuel. The Bank of England predicts that the CPI will continue to fall. The OBR states that government action has limited the severity of the recession and protected 70,000 jobs, and that it will take 3.4 percentage points off inflation by the end of March. This will contribute to a fall in inflation, which, as the Prime Minister has said, is expected by mid-year.

This leads quite neatly on to some of the points raised by the noble Baroness, Lady Lister, and the noble Lord, Lord Davies. To paraphrase, the general gist of their question was: why can we not uprate more frequently using a more up-to-date CPI figure? That is a fairly reasonable question. The Secretary of State undertakes an annual review of benefits and pensions. As I mentioned earlier, the CPI in the year to September is the latest figure that the Secretary of State can use. This is crucial to allow sufficient time for the required operational changes before new rates can be introduced at the start of a new financial year.

All benefit uprating since April 1987 has been based on this particular timing. Given the volumes involved, the technical and legislative requirements and the interdependencies across government, we state very firmly that it is not possible to undertake the uprating exercise any later than currently timetabled. I do not say this to be particularly cheeky but I wonder whether the comments might not have been quite so critical of this timing issue for the higher uprated figure had there been real evidence today of a much lower level of inflation, so all those people would be getting more than the level of inflation—perhaps I should not go there.

I turn to the local housing allowance—the LHA—which was raised by the noble Baroness, Lady Lister, and others; yes, we had 10 minutes on this in the Chamber earlier. I am not sure that I can really add to what I have said. I genuinely believe that the £1 billion that we invested in 2020 to provide support for private renters by increasing the rate to the 30th percentile was the right thing to do. It is a fact that it has been frozen but it is also a fact that the discretionary housing payments—DHPs—and homelessness protection grants are helpful. I say again that we believe it is right that we defer to local councils and local authorities to make the right decisions in terms of how to target the funds that we have given them, including to people who are generally suffering and are on the lowest incomes. It is up to them to decide what to do.

Local Housing Allowance Rates

Debate between Viscount Younger of Leckie and Baroness Sherlock

Wednesday 22nd February 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

Although I do not have that particular figure—perhaps it would come from local authorities—I will certainly be very happy to write to the noble Lord with that information.

[Baroness Sherlock (Lab)]

My Lords, let us try to understand the system. The Government set up a system where you were meant to be able to rent one of the cheapest 30% of properties in an area on the local housing allowance rate and then they froze those rates in cash terms while rents kept going up. That forces people on low incomes to compete for fewer and fewer properties in their local area. This is not at the margins. Roughly 1.5 million people on universal credit get the housing allowance. Over half of those are having to top up their rents by an average of £100 a week. The inflationary increase that the Minister mentioned for the adult allowance on universal credit was a top-up of £100 a month, but £34 extra a month is coming in. How does that work?

[Viscount Younger of Leckie (Con)]

The noble Baroness might like to be reminded that the LHA was originally set at 50th percentile of local market rents and then the policy was reformed, as she will know, in 2011, when it was reduced to 30th percentile. The reforms were made for a reason, because the scheme was unsustainable, with excessively high LHA rates in some areas. Having said all that, we are very aware of the pressures at the moment, as I said earlier, and that is why we have other initiatives to help those who are really struggling— I acknowledge that they are—in some cases with their housing costs.

Health and Safety and Nuclear (Fees) Regulations 2022

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 31st January 2023 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, the Health and Safety and Nuclear (Fees) Regulations 2022 statutory instrument was laid before Parliament on 20 December 2022 and came into force on that same day. These regulations correct an error in the powers used to make the Health and Safety and Nuclear (Fees) Regulations 2021. The error was an unfortunate oversight. Due to the volume of Covid, Brexit and trade agreement work, pressures on the Government Legal Department—GLD for short—resulted in this referencing error not being picked up in checks. HSE and GLD regret the error and are taking steps to reduce the risk of this sort of error happening again. The error was identified by GLD during a recent review.

The urgency to make these regulations arose from the need to use the powers in the European Union (Withdrawal) Act 2018 before they expired on 31 December 2022 and so avoid the requirement for primary legislation. This instrument has to be made in the affirmative and debated in both Houses because this is what the EU (Withdrawal) Act 2018 specifies.

This instrument is non-contentious, as it repeats the previous regulations with some minor technical changes. The preamble to the Health and Safety and Nuclear (Fees) Regulations 2021 did not cite one of the enabling powers and was not made with the consent of HM Treasury to certain fees for chemical regulation functions which were transferred from the EU. The correction ensures that the Health and Safety Executive can continue to recover its costs for these functions.

The preamble in the 2021 regulations refers to paragraph 7 of Schedule 4 to the European Union (Withdrawal) Act 2018. It should also have referenced paragraph 1 of Schedule 4 to give the powers for the provisions which allow charging for certain regulatory activity around biocides and classification labelling and packaging—so-called CLP. In addition, this same error was repeated in later regulations, which contained a series of amendments to, and mirrored powers in, the 2021 regulations. This instrument also corrects that error.

Biocides and CLP provisions in the fees regulations 2022 rely on paragraph 1 of Schedule 4 to the European Union (Withdrawal) Act 2018, and so consent from HM Treasury is required, as referenced in paragraph 3 of that schedule. I can assure your Lordships that consent has been given. I can also assure your Lordships that we have a rigorous checking process in place which will normally ensure that errors are identified before instruments are made.

In conclusion, I take this opportunity to emphasise that this instrument is a restatement of the fees regulations 2021, with the correct powers cited in the preamble and for which HM Treasury consent has been obtained. These changes put beyond doubt the ability of HSE to charge fees for certain biocides and CLP regulatory activity. The instrument makes no changes to policy or duties, although, as explained in the Explanatory Memorandum, it corrects some minor technical errors as well.

I hope that colleagues of all parties will join me in supporting the new regulations, which I commend to the Committee. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for that introduction, and I can only take it that the remarks he addressed to “colleagues of all parties” means me, so I am delighted to be here. I also love it when a Minister announces, as was done in the Commons as well, that an instrument is non-contentious. From the Opposition Benches, our mind goes, “Well, we’ll see about that; that’s our call.” It is not the kind of thing one can do unilaterally.

However, as we have heard, this instrument revokes and replaces the Health and Safety and Nuclear (Fees) Regulations 2021, as amended by the amending regulations, and consequentially revokes Regulation 14 of those. We have heard that the purpose is to correct a number of errors. I accept that some of them are clearly technical. There is the incorrect cross-reference in Regulation 12, the error in the definition of “nuclear provisions” in Regulation 16 and the omission from Regulation 22 of the process clarifying how to interpret terms on classification, labelling and packaging, and so on.

However, there is a more serious error. The fees regulations 2021, as amended, were meant to enable the Health and Safety Executive and the Office for Nuclear Regulation to charge fees for a range of specified activities, but, as we hear, it has become apparent that an error in the preamble to the regulations and to the amending regulations has caused a problem. Neither cites paragraph 1 of Schedule 4 to the EUWA 2018, but both should have done so. The problem is that that would have allowed provision for the charging of fees in connection with functions following Brexit, particularly those performed by the HSE in relation to biocides and chemicals—I still think fondly of our long debate on biocides and chemicals not very long ago.

I have some questions. The effect of the error was that the required Treasury consent was not sought prior to the making of regulations under paragraph 1 of Schedule 4 to the EU withdrawal Act. I accept that the Treasury has indicated that it would have given consent had it been asked. However, it was not asked, which is of course the problem. The EM says that the error

“may raise doubt as to HSE's ability to continue to recover the affected fees.”

Can the Minister unpack that a little more for us? First, we need to be clear what fees have already been charged using the flawed powers in the 2021 regulations. When these regulations were debated yesterday in the Delegated Legislation Committee in another place, the Minister, Mims Davies, said:

“About £25,000 was charged across the industry under the powers related to the error. However, HSE judged that there is a low chance of any case being brought, due to the amount of money involved. That is why we are rectifying it extremely quickly. HSE will continue to manage any legal implications on a case-by-case basis.”—[Official Report, First Delegated Legislation Committee, Commons, 30/1/23, col. 8].


Can the Minister tell the Committee: was there a legal basis for charging those £25,000-worth of fees? If not, will the money be refunded to the firms which paid them, or do I take it from that last sentence of the Minister that the Government are simply waiting to see whether anyone who paid them under deficient rules will sue to get their money back? Were any fees not charged as a result of this error that would otherwise have been charged? If so, has any revenue been lost?

There are two other questions. We need to know more about how we got here and, more importantly, how the Committee can be assured it will not happen again. I accept that drafting errors happen, of course, but there are quite a lot of errors in one set of regulations here. Yesterday, the Minister gave the explanation that the noble Lord has repeated today, which dumps the blame pretty much lock, stock and barrel on the Government Legal Service, saying that it was under pressure as a result of Covid, Brexit and trade agreement work, it had too much pressure and that is why it happened. The only problem with that is that two of those three were completely foreseeable. I realise that post Brexit there will have to be redrafting of regulations and other legislation, but the volume and speed is a direct consequence of decisions the Government made about the nature of Brexit and about the way to handle retained EU law.

So, knowing all this, why did the Government not plan and resource the GLD accordingly so that it could deal with the volume of work and the pressure that it would be facing? We cannot simply accept that our statute book should be in a mess as a result of Brexit. There were various points at which these errors could have been picked up. Why were they not? Is there a quality assurance process in place? Does the HSE or the DWP do any checking of their own legislation? Do they literally just give it to the GLD, say, “Do it!” and then take whatever is given back and put it out? Is there a quality assurance process and, if so, why was none of the errors picked up? I spent some years as a non-executive director on a board. If the executive reports a significant error, the question that one asks is: is it systemic? If the answer comes back, “No, it is not”, then one wants evidence of that; if the answer is: “Yes, it is”, one wants to know how one can be assured that it will not happen again?

The Minister yesterday in the Commons said that,

“the HSE and the GLD have completed a full review of the lessons learned,”

and,

“identified some practical actions”.—[Official Report, Commons, First Delegated Legislation Committee, 30/1/23; col. 7.]

to improve ways of working between their officials. That is nice but—this is an important question—if those practical actions had been in place, would they have avoided these errors? So, one has done lessons learnt. If one had done those things then, could this error have happened? If it could still have happened, then we have not solved the problem. Did the review look at other errors, other than the one that it turned out had created this problem?Crucially, how confident is the Minister in assuring the Committee that something this serious will not happen again?

Finally, we are told that

“the Department is adopting the free issue procedure in relation to this instrument.”

Do I take it that that means that there will be free issues of this instrument and the amendment regulations? What will be the cost of that?

Given that I have fired a number of questions, I really want to get answers today—I do not want any more letters because they never arrive, or they may arrive eventually but it takes a long time and these regulations have already been made. To clarify, I am interested in finding out: what happened; why the mistakes were not picked up; whether fees were charged without any legal cover and, if so, whether fees are going to be refunded and whether there were fees that could have been charged that have not been; whether there is quality assurance in place; and whether the DWP and the HSE do any checking of their own legislation and how they can assure us that this will not happen again. I look forward to the Minister’s reply.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Baroness, Lady Sherlock, for her response. I totally understand the tone and nature of the questions that she has asked. I hope that I can respond. It may be that the detail in the responses is not quite what she is looking for and, of course, I will say that I will write to her if the answers are deemed to be not satisfactory. But I will certainly do my best.

I should like to say first that these errors are unfortunate. As I said, the error was an unfortunate oversight caused by pressures on the GLD—the legal side—due to the volume of Covid, Brexit and trade agreement work. Despite checks in place, the omission of one of the powers from the preamble was not noticed. I shall go into a little more detail in terms of how the error was noticed. The preamble to the fees regulations 2021 referred to Paragraph 7 of Schedule 4 to the EUWA 2018 but should have also referenced Paragraph 1 of that schedule. The error was repeated in the amendment regulations, being a set of regulations that amended the fees regulations 2021. Due to that unfortunate oversight, the correct power was not cited in the preamble, which meant that certain regulations were made without the consent of HM Treasury, as they should have been. The error was spotted during a recent review of the fees regulations 2021, as I mentioned.

On the noble Baroness’s question what has been done to prevent such errors happening again, I believe that the review has been rigorous, and we do not believe that it will happen again. However, I shall give a bit more detail. HSE and GLD have completed their review of lessons learnt. This has identified some practical actions that can be taken including better ways of working between GLD crucially and HSE policy officials.

The question of HM Treasury and its role came up, and perhaps I can be helpful in answering some questions. HM Treasury has approved the 2022 fees regulations and has confirmed that consent would have been provided at the time of the 2021 regulations, if sought. HM Treasury consent was given when the fees were first introduced into UK law in 2019 by way of amendments to the fees regulations 2016. HSE is informing HM Treasury of the proposed treatment of the approximately £25,000 of fees received between 1 April 2021 and 21 December 2022. Some 14 companies have been charged between £500 and £5,000, so I hope that is helpful.

--- Later in debate ---

[Baroness Sherlock (Lab)]

On the £25,000, I asked a specific question: was there legal cover for charging that money? I would like an answer to that. I think the Minister said that the HSE is informing the Treasury as to what it will do about the money. Can he inform us what it is going to do about it rather than just the Treasury?

[Viscount Younger of Leckie (Con)]

Those are two fair questions. I will have to write to the noble Baroness to follow through on the specific details that she has asked for. I will certainly write a letter and make sure that she is fully informed. With that, I commend these regulations to the Committee.

Universal Credit: Benefit Cap and Two Child Limit

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 24th January 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

My Lords, first, we are very aware of the fact that some people are finding it particularly difficult at the moment—some very good points have been made about that. One of the issues to focus on, which we are doing, is childcare, which is a key enabler of employment for parents and has clear developmental benefits for children. Of course, the onus falls on the caseworkers in the jobcentres. Often they are very well trained, and they have to deal directly with these people who come with some heartfelt stories.

[Baroness Sherlock (Lab)]

My Lords, can I give a specific example? The most reverend Primate has talked about the impact on individuals. The larger families study that the Minister mentioned interviewed parents who have been affected by this. It gives the example of a single mother who had experienced domestic abuse. She was given an exemption from the two-child limit under the rape clause because the child was conceived by rape, so she was then awarded an extra £237 a month. But then the benefit cap kicked in and she got only £30 a month of it. Because she struggled to provide for her children, she ended up returning to a violent relationship. I ask the Minister again: what does he think about the impact of these policies, not just their number?

[Viscount Younger of Leckie (Con)]

The noble Baroness makes a good point because we should be aware of the impact, which is why we are working hard on a number of initiatives. As she will know, there are a number of fallbacks on top of this, particularly the provision of cost of living support worth over £37 billion for 2022-23, including £400 for the non-repayable discount to eligible households. However, it is more than this. I am in awe of people on the front, including those who work in the front line of the jobcentres, who work with the social workers, and indeed with the Church, to see through these very challenging issues for some families.

Bereavement Benefits (Remedial) Order 2022

Debate between Viscount Younger of Leckie and Baroness Sherlock

Tuesday 17th January 2023 Grand Committee

[Baroness Sherlock (Lab)]

I am grateful to the Minister and thank him for the answers he has been able to give. He was unable to answer questions from my noble friend and me about the treatment of the lump sums, which are extremely important. They are at the heart of the way this order will be operationalised. Given that, according to the order, it takes affect the day after it is made, can the Minister undertake to write as quickly as possible?

[Viscount Younger of Leckie (Con)]

The noble Baroness raises a very fair point. I will speak to the team and see what we can do to write a letter quickly covering all the points, not just that particular point.

Food Banks

Debate between Viscount Younger of Leckie and Baroness Sherlock

Monday 9th January 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

That is a very important part of our programme, and the Government recognise the importance of safeguarding the welfare of claimants who have incurred debt. The primary aim of deductions in universal credit is to protect vulnerable claimants by providing a last-resort repayment method for arrears of essential services. With the extreme pressures there are at the moment, I reassure the right reverend Prelate that we are doing our very best to look at what more we can do to help people who get into severe debt.

[Baroness Sherlock (Lab)]

I welcome the Minister to his new brief; I very much look forward to engaging with him in the months ahead. I thank the noble Baroness, Lady Stedman-Scott, for her service in this role.

In 2010-11, the Trussell Trust ran around 35 food banks. Last year, it ran 1,400 of them. Does this not go to the point made by the noble and right reverend Lord, Lord Harries of Pentregarth, that something has happened and food banks have moved from the margin to the mainstream of government policy? I want to ask the Minister a really simple question: do the Government think that that is okay or that it is a problem? If it is the latter, what are they going to do about it?

[Viscount Younger of Leckie (Con)]

It is not okay. It is fair to say that we are continually looking at different ways in which we can help the most vulnerable, and I have set out some of them to the House this afternoon. On food banks, which are linked to the noble Baroness’s question, as I said, the family resources survey will help us; it is important for us to know what is going on. Let me also take this opportunity to applaud all those volunteers who work in food banks; they are doing vital work to help feed those who simply do not know where their next meal is coming from.